Why India Needs to Auction More 3G Spectrum?

india-3g-spectrumIn the last one week many a media reports suggested citing COAI and GSMA that the government should auction spectrum in 2.1GHz band. Both the above mentioned industry bodies have urged the ministry of telecom to consider allocating more 3G spectrum in 2.1GHz band. But why this sudden urge for 3G and from where did this emanate from when the entire country is only talking about 4G LTE and Reliance Jio?

It all started with the 100-day agenda of the telecom ministry and the sector minister Ravi Shankar Prasad. While the minister, in couple of his meetings with the media, has repeatedly said that he is all for a fair and transparent allocation of spectrum and he is working on “…spectrum sharing, spectrum trading and spectrum enlargement.” But the 100-day agenda of the telecom minister, accessed by TeleAnalysis, mentioned roadmap of spectrum auction in all available bands like 700 MHz, 800 MHz, 900 MHz and 1800 MHz but unfortunately misses out the auction in 2100 MHz band, which is the 3G band. That put the industry in a tizzy.

But why 3G spectrum now? Well, like voice services have been most successful on 900 MHz and 1800 MHz band, data services have been widely used on 2100 MHz band and it has well developed ecosystem. Also, maximum number of mobile devices are operational in this band for mobile broadband – approximately 1,500 devices compared to 195 devices on 1800 MHz and 500 devices on 900 MHz band. Secondly, data intake has been growing in leaps and bounds in India, and to retain that momentum India needs to provide reliable and fast mobile broadband to its citizens. This can only happen through 3G and 4G services but 4G is a distant future as despite the spectrum was allocated four years back, the country is yet to see the light of the day.

The last 3G spectrum auction was happened four years back, in 2010, and a total of 25 MHz was auctioned. But because of scarcity of spectrum and with a flawed auction process, as experts suggest, none of the telecom operators could get a pan India access to roll out 3G services. But as per the availability, another 15MHz of 3G spectrum can be rearranged and 3 more slots of 2*5 MHz in 2100 MHz can be made available to the operators for commercial use. There are 2 blocks of 2*7.5 MHz in 1900 band is being held by defence, which the DoT had asked the ministry of defence to swap with 2100 MHz. The proposal was sent to MoD during the previous government, though there has been no response yet, this new government under Narendra Modi is using a similar kind of swap structure for 1800 MHz band.

“If the government can do a swap for 1800 MHz band with defence, they can do the same for 1900 MHz,” says a senior telecom executive working with a private operator who deals with regulatory affairs.

“The defence equipments are tunable over a wide range of frequencies and thus there is no way why it (swap) can not be made possible,” he added.

When asked if the telecom minister and the new government are so pro-development and the industry has high hopes from the minister, why did Ravi Shankar Prasad miss out on auction of 2100 MHz band, a senior member of one of the industry associations had a tricky answer.

“He might be wanting to do a good job but at the same time, perhaps, he was not provided with the right kind of information.”

The COAI, the industry body for telecom operators in India, has written a letter asking for auction of more 3G spectrum in 2100 MHz band, and even suggested that, in case the swap proposal was not passed through, a partial auction can also be done in that band, as it was done in 1800 MHz band in February this year.

Besides providing another 3 slots of 3G spectrum for commercial use to operators, the government can rake in close to Rs 50,000 crore from the spectrum auction, if we go by the base price of  3G airwaves that was realized in the last 3G auction.






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