Harmonising 1800MHz PDF Print E-mail
Tuesday, 12 April 2016 01:31
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Critical for Vodafone and Idea to get 4G spectrum


With India’s leading telecom operator Bharti Airtel spending R7,900 crore to acquire spectrum from Videocon and Aircel in two separate deals—taking its pan-India holdings to roughly 600 MHz—it has blunted the first-mover advantage that RJio would have had since it also now has 4G spectrum in all 22 circles in the country. While Bharti Airtel’s moves will ensure the next auction will not be the do-or-die it was the last time around when telcos scrambled for spectrum in order to not lose their current customers once their spectrum-life ran out, it also creates a lot of uncertainty for other market leaders like Vodafone and Idea. Vodafone has 4G spectrum in just five circles right now while Idea has it in 10 circles—while both players can expand their 3G footprint, given the way data-traffic is growing, being able to acquire more 4G spectrum can be critical. Theoretically, telcos like Vodafone and Idea can bid for the 320 MHz of spectrum on offer in the 2300 MHz frequency band and offer 4G services on this, but neither seems to want spectrum here, presumably because a lot more towers need to be set up to service this band—had either been interested, there would be a lot more competition to buy Videocon’s spectrum; indeed, having inked the deal first, Idea walked away from it, and only then Bharti Airtel stepped in.

Right now, with very little spectrum being offered in the 1800 MHz frequency band, telcos can’t really augment their 4G capacity from the auction; they can, though, bid for spectrum held by telcos like Aircel or Telenor. If, however, the government quickly moves on harmonising the 1800 MHz frequency band—that means creating contiguous chunks of 5 MHz which are critical for offering data services—a Vodafone or an Idea can look at increasing their 4G presence in another 9 or 10 circles; Idea can also complete the partial 4G footprint it has in circles like Haryana. In the case of a Vodafone, for instance, the harmonisation will also allow it to rearrange its existing spectrum so as to be able to get a contiguous 5 MHz chunk of 1800 MHz spectrum. In Gujarat, for instance, Vodafone has two chunks of 3.4 MHz and 4.4 MHz in the 1800 MHz frequency band—right now, this is useless as far as data services are concerned, but harmonisation will fix this. Indeed, even if 1800 MHz spectrum is bought from Aircel or Telenor, or got by way of spectrum-sharing with existing players, a contiguous chunk is possible only through harmonisation. Though it is true harmonising the 1800 MHz band is more critical for telcos than it is for the government, given the fact that the government could get upwards of R20,000 crore for it, that is an important enough reason for pushing it before the next auction.


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