Despite SC clarification, DoT to go ahead with 900 mhz auction

New Delhi: The Department of Telecom (DoT) will auction 900 mhz spectrum as planned earlier.

DoT’s pro-auction stand came today despite the Supreme Court saying last week that 900 mhz was not part of its earlier judgement (after which fresh auctions had to be conducted) which led many incumbent telcos to hope that there could be a rethink on the 900 mhz auction.

“We will go ahead with the auctions of 900 mhz, there is no change in this,” a senior DoT official told Firstpost.

[caption id=“attachment_629626” align=“alignleft” width=“380”]  Incumbent telcos offer 2G services by using 900 mhz spectrum and 1,800 mhz spectrum. AFP[/caption]

An NDTV Profit story said on Friday that the Supreme Court stated the February 2012 judgement will not be applicable on telecom companies holding the spectrum in the 900 MHz band.

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“The February 2, 2012 order will have no bearing on litigation relating to 900 MHz band,” the bench comprising justices G.S. Singhvi and K.S. Radhakrishnan said, adding that it (900 MHz band spectrum) was not the subject matter before it.

The auction of 900 mhz spectrum, which is being used by incumbent telcos to offer 2G services, has been controversial since it involves refarming too.

Incumbent telcos offer 2G services by using 900 mhz spectrum and 1,800 mhz spectrum; 900 is twice as efficient as 1,800 mhz which means lower cost of operation for telcos.

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But the DoT has already decided to refarm 900 mhz which means taking it away from incumbents, putting it up for auction and letting telcos pay a much higher price if they want to get back 900 mhz spectrum.

Else, telcos can buy the cheaper 1,800 mhz spectrum in the upcoming auctions.

The DoT official quoted above said the spectrum auction would be held on schedule (auctions for 1800 mhz and 900 mhz are scheduled to begin on March 11), telcos will be asked to make payments for the spectrum they buy in the auctions but spectrum would be assigned to them only when their respective licenses expire.

The SC made it clear last week that telcos are free to challenge the auction for spectrum in 900 mhz band. So in effect, challenges in the 900 mhz spectrum band matter have become even more complex:

1. Telcos will likely challenge the DoT’s pro-auction stand, saying auction and refarming would disrupt services and the government should not seek all 900 mhz spectrum back from incumbents.

2. DoT will have to put up all spectrum for auction since the SC has clearly said so.

3. DoT’s plan to refarm 900 mhz spectrum band may be disrupted.

An Economic Times story on Friday quoted an unnamed DoT official as saying it may put up the entire 430 MHz airwaves freed after cancellation of mobile permits for auction in March.

The same story also said refarming of 900 MHz band would be disrupted as DoT would have to put up all available 2G spectrum for the March auction.

The government had earlier said it would allow operators to keep a portion of airwaves in the more efficient 900 MHz band and refarm the rest, replacing it with less efficient spectrum in the 1800 MHz band.

Since all spectrum in the 1800 MHz band will be up for sale, as per the Supreme Court order, DoT may not be able to keep enough airwaves for refarming.

Opposing the government’s plan to refarm 900 mhz spectrum band last year, the Cellular Operators Association of India (COAI) had said operators with 900 MHz spectrum will have to replace 286,590 base stations and install an additional 171,954 base stations to provide equivalent coverage on 1,800MHz. This will lead to an incremental capital expenditure of Rs 54,739 crore.