GSM Cos Against Lowering of Base Price for 800 MHz Airwaves
India’s GSM operators have told the telecom department (DoT) that it should not reduce the base price suggested by the sector regulator for the auction of 800 MHz frequencies, opposing a demand from companies which use this band to provide CDMA-based services. In a letter to telecom secretary MF Farooqui, GSM lobby group Cellular Operators Association of India (COAI) said the reserve price recommended by the Telecom Regulatory Authority of India was “significantly lower than the prices realised” for 900 MHz band in the recently-concluded auction.
In February, Trai suggested .` 2,685 crore as the base price for a megahertz of allIndia CDMA airwaves.
The suggested base prices for 800 MHz bandwidth in Delhi, Mumbai and Kolkata were effectively “39%, 37% and 48% be- low” the winning bids of 900 MHz spectrum in these circles in the February auction, COAI said. ET has seen a copy of the letter. COAI’s members include the nation’s top three mobile services providers -- Bharti Airtel, Vodafone India and Idea Cellular. The 900 MHz band is typically used by GSM operators in India. CDMA operators like Sistema Shyam Teleservices had called the base price too high and wanted the government to reduce it. But, COAI says that is not nec- essary, especially if the Department of Telecommunications (DoT) can ensure 5 MHz of contiguous, or continuous, spectrum in blocks of 1.25 MHz within the 800 MHz frequencies. Continuous spectrum is more efficient than non-contiguous bandwidth, and can be used for delivering data services based on fourth-generation long-term evolution technology. The sector regulator had also cited the spectrum’s higher efficiency for recommending the base price, which was more than the .` 1,765 crore per 1 MHz market-discovered price for 1800 MHz bandwidth in the February auctions.
In February, DoT had offered pan-India spectrum in the 1800 MHz category. At the time, 900 MHz was available only in Mumbai, Delhi and Kolkata circles.
Sistema Shyam, which called Trai’s valuation methodology fallacious, wanted DoT to set the base price below 80% of the price of 1800 MHz. The Telecom Commission, the top decision- making body within DoT, takes the final call on pricing. Meanwhile, DoT may ring in dual pricing for contiguous and non-contiguous spectrum to be auctioned in the 800 MHz frequency band, sources said. The department’s plans are in response to Trai feedback that continuous spectrum for a block of 5 MHz is available only in four of the 22 service areas.