India's Operators Set for Spectrum Windfall
The decision comes after a protracted battle between the Defense Ministry and the Department of Telecommunications (DoT) and will see 15 MHz of the spectrum released immediately, with the rest to be allocated over the next three years. Of the 15 MHz for immediate release, 10 MHz is for 3G and 5 MHz in the 2G band, according to the report.
The DoT was unable to confirm the report to Light Reading at the time of publication, but such additional 3G spectrum could add two spectrum blocks to the long-delayed 3G auctions that are expected to take place within the next two months. (See IndiaWatch: 3G Auction Imminent).
The imminent availability of more spectrum will also be welcomed by India's 2G operators, as they have significantly less spectrum than most of their contemporaries around the world.
India's GSM operators receive 4.4 MHz of startup spectrum, while CDMA operators get 2.5 MHz: More spectrum is allocated only once the operators reach specified subscriber targets. Even then, spectrum is limited, with India's largest operator Bharti Airtel Ltd. (Mumbai: BHARTIARTL), which has more than 100 million mobile connections, only in possession of 8.8 MHz.
To put that into perspective, evidence given to a recent Telecom Disputes Settlement & Appellate Tribunal (TDSAT) hearing identified the global average of spectrum available to mobile operators as 25 MHz. In China, another market that experiences high monthly subscriber additions (though not the 10 million-plus that India regularly reports), the mobile operators have 22.5 MHz, leaving the Indian operators well behind. (See India Tops 400M Mobile Subs.)
The availability of new 2G spectrum will also serve to heighten the debate around allocation methods. The TRAI came under stark criticism from the TDSAT for allowing Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL) additional spectrum without meeting the relevant subscriber targets, while the same appeal ruling brought the commercial operators up short by refusing their claims for an automatic right to 15 MHz. (See Indian Tribunal Orders Spectrum Return).
The government is now expected to replace the subscription-based allocation of new 2G spectrum with auctions, meaning that 2G auctions could follow fast on the heels of those for 3G. (See India Auction Fever).
For more on India's spectrum allocation, see A Guide to India's Telecom Market.
— Catherine Haslam, Asia Editor, Light Reading