Trai Invites Consultation on Allocation of 700 MHz Spectrum to Railways Jeopardising Rs 1 Lakh Crore Revenue

Indian Railways has requested DoT to allocate chunks of 700 MHz spectrum for passenger safety and security applications

By June 25th, 2019 AT 12:44 PM
Highlights
  • The spectrum would be worth Rs 1 lakh crore according to current price recommendation of Trai
  • DoT has already allocated 10 units of spectrum to armed forces in the 700 MHz band

The Telecom Regulatory Authority of India (Trai) has sought views of the industry stakeholders on whether or not it should allocate a large chunk of 700 MHz spectrum to the Indian Railways for passenger safety and security applications, as per an ET Telecom report. Since this spectrum will be allocated to Indian Railways for free, the government believes that the Department of Telecommunications (DoT) will be giving up an opportunity of netting approximately Rs 1 lakh crore in the upcoming auctions for 4G and 5G spectrum. In this related development, the Railways has asked the department of telecom to set aside 15 units of spectrum in the 700 Mhz band and initially allocate ten units free of cost.

trai-reconsider-prices-spectrum-auction

Railways Requests 700 MHz Premium Spectrum for Safety Applications

The Department of Telecommunications, on the other hand, had referred the matter to the telecom regulatory back in February 2019. On this, the telecom regulator said that if the railway’s request is granted for allocating this spectrum, then the residue of the spectrum left in the 700 Mhz band would not be sufficient for 4G and 5G spectrum, and thus it would again boost the pricing of the already expensive airwaves. To recall, the telecom operators had given the 700 Mhz a miss on the grounds that the spectrum was overpriced.

The Telecom Regulatory Authority of India (Trai), in a discussion paper said that the spectrum which has been requested by the Indian Railways from the Department of Telecommunications (DoT) would fetch Rs 1 lakh crore upfront with the allocation happening for an indefinite period for 15 units and 10 units initially. Further, over a period of 20 years, it would fetch a few thousand crores in the form of spectrum usage charge (SUC) which would be accruable quarterly.

Trai, in its latest paper, has penned down eight questions pertaining to the allocation of the 700 MHz spectrum to the Railways, and the methodology that should be used to allocate the spectrum to the respective authority. Trai has also remarked whether the spectrum in the 450 – 470 MHz band can be used for meeting the Railways’s demands and the pricing of such spectrum. It has sought suggestion on whether or not the telecom operators can build, deploy and maintain the proposed LTE-based radio communications corridor for railway passenger safety.

Leftover Spectrum in 700 MHz to be Insufficient for Telcos

Trai in its discussion paper said, “DoT is of the view that the spectrum in 450-470 Mhz band be explored for meeting the railways’ requirements as reserving 15 units of 700 Mhz spectrum would limit the supply of such airwaves, which can also hike their price, and jeopardise the growth plans of telecom operator.”

It is also worth noting that allocating of 15 MHz spectrum would only leave 20 MHz per circle of spectrum for the telecom operators which would be insufficient given that 3 to 4 telecom operators would be active on 4G and 5G services. The DoT has already allocated 10 units to the armed force, leaving only 35 units proposed for 4G and 5G services.

In August last year, Trai had recommended the sale of 8,644 Mhz of airwaves in the premium bands of 700 Mhz, 800 Mhz, 900 Mhz, 1800 Mhz, 2300 Mhz and 2500 Mhz bands. There were also talks about the debut of the 5G spectrum in the 3.3-3.6 Ghz band, which was estimated at Rs 5.86 lakh-crore at base price.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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