Vodafone fires first salvo against spectrum refarming

Vodafone India has fired the first salvo against spectrum refarming. In a letter to Telecom Secretary R Chandrashekhar yesterday, Vodafone has sought extension of its united access service (UAS) licences in three service areas of Delhi , Mumbai and Kolkata by 10 years but said this should be done without any change in licence conditions.

In addition to other licence conditions remaining same, Vodafone has asked for continuation of existing spectrum too.

Under refarming, the government plans to take away all but 2.5 mhz of the more efficient 900 mhz spectrum band which incumbent telcos possess. If they want spectrum, telcos have to bid for the much less efficient 1800 mhz band in the upcoming auctions.

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[caption id=“attachment_564612” align=“alignleft” width=“380”]  Not just Vodafone, Bharti and Idea have also in the past protested strongly against the government’s decision to refarm spectrum. Reuters[/caption]

Even for the 2.5 mhz of 900 mhz band which these telcos will be allowed to retain, they will have to shell out two times the 1800 mhz reserve price in all circles.

For Vodafone, licences in all the three circles of Mumbai, Delhi and Kolkata come up for renewal beginning November next year. While asking for the licence extension, Vodafone has opposed any move towards refarming, though not in as many words.

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The three identical letters it has written requesting for licence extension in each circle mention that “extension of license period is a continuation of the already set up network, including continuation of existing spectrum, which is intrinsic to our licence and is being used for providing service to consumers under the licence”.

According to sources, Vodafone already has 8 mhz of 900 mhz band spectrum in Delhi and Mumbai and 7.8 mhz in Kolkata. In the 1800 mhz band, it holds only 2 mhz in each of these three circles.

Obviously, if it is forced to return all 900 mhz spectrum and then participate in auctions at multiple times the price, business will suffer.

Not just Vodafone, Bharti and Idea have also in the past protested strongly against the government’s decision to refarm spectrum.

Speaking on the refarming issue earlier, GSM industry body COAI had pointed out that servicing 450-500 million subscribers in the existing 900 Mhz band with the same quality of service with a limited 2.5 Mhz of spectrum in the 900 Mhz band and the remaining on 1,800 Mhz band would become next to impossible and disruption of wide-scale services should be expected.

COAI had also pointed out that an operator with 2.5 Mhz in the 900 Mhz band and the remaining spectrum in 1,800 Mhz band is worse off than an operator with its complete network in the 1,800 Mhz band as this network will give a false delusion of coverage.

The difference in spectrum propagation/network design in the two bands will lead to coverage constraints.

An industry expert pointed out that licence and spectrum have been delinked but only for future licence agreements. He also said the united access service licence in its present form has no specific reference to the government’s obligation to give specific spectrum in a specific band and at a specific price. The government has full flexibility to change band as well as price.