Ministerial panel orders existing telcos to retain some spectrum in 900MHz, rest would be auctioned next year

The Empowered Group of Ministers (EGoM) headed by Finance Minister P Chidambaram has allowed some incumbent GSM operators (Airtel, Vodafone India and Idea Cellular) to retain some spectrum in the 900 megahertz (MHz) frequency band, however rest of the bandwidth would be returned to the government for re-auctioning. [via]

Earlier, telecom commission had suggested to take away the entire bandwidth of spectrum held by the incumbent operators in the 900 megahertz (MHz) frequency band. The EGoM on Thursday decided to allow the operators to retain 2.5 Mhz spectrum in this band. The existing operators will have to pay a market determined price for what they retain and the rest will be open for auction. Incumbent telcos will, instead, get airwaves in the 1800MHz band as replacement.

Meanwhile, partial re-farming of 900 megahertz (MHz) frequency band  will equip government with enough spectrum space in the 900 Mhz band to accommodate a new player when it would get auctioned in 2013. This band can be used to offer fourth generation broadband services and can be useful for a player like Reliance Infotel.

On the other hand, telcos losing the spectrum have been complaining that reframing would trigger huge gaps in networks across the country and will have tremendous impact on rural connectivity. Additionally, the reframing would require investment of Rs.1.5 trillion in new towers and infrastructure to minimise the impact.

The Department of Telecom (DoT) had proposed to shift incumbent GSM players as 900 Mhz band is regarded to be 30-40% more efficient than 1800 Mhz, and DoT is of view that new operators also get an equal opportunity to use  900 Mhz band . Currently, 900 Mhz band is being used by the existing operators – Airtel, Vodafone, Idea Cellular and BSNL/MTNL.