EGoM allows Operators to hold 2.5 Mhz spectrum in 900 MHz

The Empowered Group of Ministers has finally decided to go ahead with Spectrum Re-farming by shifting incumbent GSM operators from the 900 Mhz spectrum band. EGoM has gone with latest recommendations from Telecom Commission that said partial shifting should be allowed. The incumbent players will, instead, be given bandwidth in the 1800 Mhz band.
The operators will have to pay a market determined price for what they retain and the balance will be put up for auction.
Operators like Airtel, Vodafone and Idea Cellular can now retain maximum of 2.5 MHz soectrum in prime efficient 900 MHz band. It can be seen as a 50:50 kind of arrangement where on one side Government will get spectrum free for auction and on the ohter side Operators will have some relief in terms of investments.
Has this decision solved the issue raised by operators against Spectrum Re-farming? The question now arises is that how these operators will make adjustments in their networks to serve millions of their customers.
GSM operators are not happy as still they will have to do the hard work in making availability of services to all their customers with this kind of arrangment and CDMA operators on the other hand are not feeling good as this decision holds up some part of frequencies in 900Mhz band which they could have tried to win through auctions as they do not hold any spectrum in this band.
“The partial spectrum refarming as approved by the EGoM today could result in a detrimental impact on consumers through higher prices as well as poorer quality of service. It will also not provide the financing relief the industry desperately needs to be able to reduce industry Debt to EBITDA margin ratios, which, at around 5, are currently too high”, says Mohammad Chowdhury, Leader Telecom, PwC India.
All who are a part of Telecom Industry from Individuals to corporates are eagerly waiting for the Spectrum Auction as it will clear the road ahead allowing them to see their future.