India – a major overhaul of spectrum policy

The Indian Telecom Authority (TRAI) has launched an extensive report on the future spectrum policy in India with a total transfer of 2G spectrum in 900 MHz to 1800 MHz in a grand refarming project ( And the outcome of the 2G scam is now that the cancelled licenses could be re-acquired at ten times the cost that the 2G licenses was acquired for.

As Indian operators are struggling with a limited amount of spectrum, roughly 2 x 10 MHz, in the second largest mobile market in the world the proposal is not given the operators any relief. Neither is it helping Telenor which is facing an uncertain situation as its Indian license (through its Uninor subsidiary with 4.4 MHz spectrum) has been cancelled by the Supreme Court as a consequence of the case derived from the 2G scam. Uninor is now facing the possibility to participate in an auction to re-acquire 1800 MHz spectrum. TRAI propose that 5 MHz should be auctioned in slots of 1.25 MHz, and the reserve price is ten times higher compared to what its current partner paid in the first-come-first-serve allocation in 2008. Neither are the incumbents’ operators happy with the proposal as it will require massive payments for additional spectrum, and a forced migration from 900 MHz to 1800 MHz in order to release 900 MHz spectrum for 4G. TRAI is also postponing the auction for 700 MHz to 2015. Altogether, it is an extensive proposal which is now going to be analyzed by the Department of Telecommunications (DTI) which has to give a green light in order for TRAI’s proposal to be implemented.

The take away from the proposal is that the Indian market, which is voice centric and has congested networks with operators starving for additional spectrum is not given any immediate relief from TRAI’s proposal. Moreover, it will also require Telenor to invest at least another EUR 2bn on top of the already invested EUR 2bn in order to re-acquire equivalent amount of spectrum that it has today. It could lead to that Telenor exit India leaving the remaning 6-10 operators to compete on additional spectrum in order for India to take the first step towards a mobile data development.

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *