DOT agrees to give premium band to Rlys, but for a price

The Department of Telecommunications (DOT) has agreed to give 5 MHZ of the premium 700 MHZ band to the Indian Railways for signaling purposes. The department wants the railways to utilise these airwaves for non-commercial purposes and meet its remaining requirements through delicensed spectrum.

In its response to the Cabinet note by the Ministry of Railways, DOT said 5MHZ spectrum of the 700 MHZ spectrum band can be given to the railways at a price decided by the ministry of finance.

“We have said that we have no objection in the finance ministry fixing the price for the railways as the money will eventually go to the Consolidated Fund of India,” a DOT official told Business Standard.

The airwaves, estimated to cost ~65,000 crore, are considered premium spectrum for its indoor penetration and longdistance mobile communications. They require less number of mobile towers to provide services compared to 3G and 4G services.

However, the department did not relent to the railways demand for higher quantum of the spectrum. Instead, it advised the national carrier to meet its remaining demand through delicensed spectrum, which is essentially available to anyone.

The government is also of the view that the frequency band is earmarked for mobile services and allocating it to the railways for non-commercial use may adversely impact levies like adjusted gross revenue, spectrum usage charges and licence fee.

“Signaling is one of the sensitive areas for spectrum utilisation by the railways. It can be done with the 700 MHZ spectrum band and the remaining through delicensed airwaves. That way, it would be a winwin for both railways and our department,” the official, quoted above, said.

Railways had asked for 10MHZ of spectrum, to begin with, for setting up a public safety and security service.

In August 2018, the Telecom Regulatory Authority of India (TRAI) had proposed a 42 per cent reduction in the price of 700 MHZ spectrum to ~6,568 crore per MHZ. This implied that the total value of airwaves would be ~65,680 crore at the reserve price.

The same 700 MHZ band spectrum remained unsold in the 2016 auctions when TRAI had fixed a base price at ~11,485 crore per MHZ.