TRAI recommends PAN India 3G auction in Feb 2015 – can this be a game changer for Indian Telecom ?

By January 1st, 2015 AT 1:58 PM

As we all know, we are heading towards the biggest spectrum auction in the history of Indian telecom to be conducted next month. This auction will the first time when all frequency bands 800MHz, 900MHz, 1800MHz and 2100MHz will be auctioned in a single auction.

Now in the latest development in the talks between the Telecom and Defence ministries we have been informed that yesterday the Defence ministry finally agreed to release 3 blocks of 5MHz each in the 2100MHz band in all 22 circles in exchange for equal quantum of spectrum in the 1900MHz band. TRAI has suggested DOT to auction this spectrum in Feb 2015 at a base price of Rs 2,720 cr per MHz of pan Indian 3G spectrum.


What this means:

Currently we have 6 private operators and one PSU (MTNL+BSNL) that have 3G spectrum in India. None of the private operators hold Pan India 3G spectrum and are offering services on each other’s spectrum through ICRA with the permission of TDSAT. With 15MHz of fresh spectrum in 22 circles there will be a total of 330MHz of 3G spectrum put up for auctions which is sufficient for the entry of 3 new operators in each circle and enough for all 6 private operators to have Pan India footprint. Also the clarity on the availability of 2100MHz spectrum will prevent the bloodbath in the 900MHz bidding since that spectrum is suitable for both 2G and 3G services like Idea did for Delhi circle.

The unclear aspects:

Some points still continue to remain in ambiguity. Will the Defence ministry also vacate the additional one block of 5MHz in 17 circles under the MOU signed with the Telecom ministry in 2009 whereby it had vacated 4 blocks of 5MHz in all 22 telecom circles and an additional 1 block of 5MHz in 5 circles, the spectrum in the remaining 17 circles still lies with the defence ministry. Also the TRAI has suggested DOT to auction the 5MHz 3G spectrum in three circles held by STEL which has shut down operations in India. If both these groups of spectrum are also put up for auction in Feb then it will add an additional 100MHz to the already proposed 330MHz of fresh 3G spectrum.

TT perspective:

Until now Reliance Jio is the only private operator (Yet to launch commercial services) to hold Pan India BWA license and this is in the form of 20MHz in 2300MHz band for TD-LTE. Since the ecosystem for TD-LTE is poorly developed, Jio bought additional spectrum in 1800MHz for launching FD-LTE services on a relatively better developed device ecosystem. But since it doesn’t hold this spectrum Pan India and also for the sake of consumers who don’t have 4G handsets Jio was in talks with RCOM for using its 3G spectrum as fall back for its subscribers.

If Pan India spectrum in 2100MHz band is auctioned Jio may be interested in bidding for it (one or two blocks pan India) so as to be self-sufficient in terms of active infrastructure which can at a later stage also be used to offer LTE-A services through carrier aggregation. Airtel, Vodafone, Idea and Rcom will be the other operators looking at establishing a Pan India footprint.

Keep reading for more updates on the upcoming spectrum auction and wishing all of you a very happy new year 2015.

Esmail is our very own in-house spectrum specialist. He is passionate about Telecom, DTH and OTT video streaming apps. When not writing an article, you can find him binge watching shows on Netflix while sipping on a cup of coffee.

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