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Saturday, 29 September 2012 00:48
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RoFR could help telcos losing 900 MHz spectrum

The older telcos who stand to probably lose their more effective 900 MHz spectrum as part of the planned refarming exercise can take heart from what’s happened at the Taj Mahal hotel in the heart of the capital. Like them, the Taj’s management too developed the iconic brand hotel on its 33-year lease and was convinced this would be extended, probably on similar terms, after the lease had expired. And perhaps it would have, but we live in more transparent times, where every deal is scrutinised, often by competitors who then try and make it impossible for the government to do anything but the right thing. In the case of the Taj, this meant not renewing the lease for another 33 years and, instead, inviting Taj’s competitors to participate in a bid for taking over the hotel.

In telecom, similarly, while the older telcos feel they should be allowed to retain their 900 MHz spectrum as their networks have been organised based on this, and that there was an implicit promise the spectrum would be renewed, other telcos are of the view that they too should get a shot at the more efficient spectrum.

Though the Right of First Refusal (RoFR) wasn’t part of the Taj agreement, the government deciding to offer the Taj an RoFR in the auction shows a welcome maturity. It allows the Taj to get another shot at running the hotel it set up while giving the government some welcome revenue. In the case of telecom, an RoFR for the existing 900 MHz spectrum-holders will give them a shot at retaining the spectrum and will give the government more revenue—given that the newer players will get a shot at raising the auction price, it will also reduce the advantage that the older players have over the newer ones thanks to them holding the more efficient 900 MHz spectrum. Sounds a sound idea for all concerned.


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