DoT-Trai spat over spectrum pricing deepens

NEW DELHI: The spat between the telecom department (DoT) and the telecom regulator on pricing of spectrum in the 800 Mhz band appears to have deepened further.

In a letter to the DoT on December 12, the Telecom Regulatory Authority of India (Trai) has sought clarifications on a host of issues before it recommends a reserve price for auctioning airwaves in the 800 Mhz band, typically used by CDMA operators.

The regulator hasn't been keen on doing so in the recent past, citing a dying ecosystem - a view opposed by DoT. Trai however, now has to suggest a starting price for airwaves in that band after the empowered group of ministers (EGoM) agreed with the DoT's views and the DoT again requested the regulator for a floor price.

In its latest later, the regulator wanted the DoT to confirm if it had communicated the regulator's views, and its subsequent clarifications to the department, to the inter-ministerial panel (EGoM).

It has asked if DoT, as per Trai's suggestions, carried out a feasibility study to swap the defence spectrum holding between the 925 Mhz and 935 Mhz with airwaves in the 834 Mhz-844 Mhz band, according to contents of the letter reviewed by this paper.

The DoT had previously argued that considering the airwaves in the 800 Mhz band as extended GSM band (E-GSM) would have left 10 Mhz unutilized in the 834-844 Mhz. It further argued that to ensure availability of adequate spectrum in this band, the defence forces would need to vacate spectrum, a move which would take some time all of which would result in delay of auctions, and hence loss of revenue.

The latest letter from Trai to the DoT comes in the backdrop of EGoM decision backing the decision of the telecom commission - the highest decision making body in the DoT - that bandwidth in the 800 Mhz band should also be auctioned.

The Trai, on the other hand, had repeatedly opposed auction of spectrum in that band, and refused to suggest a reserve price for it. Instead, the regulator had suggested that the spectrum in this band should be explored as an extended GSM band.

The Trai rationale was that while CDMA technology was dying out there was high demand for spectrum in the GSM technology.
Consequently, bidding and resulting revenue would be higher if spectrum was auctioned to GSM players instead.

In the letter, the regulator has further asked how much spectrum will DoT auction in each circle. It wanted to know why the department auctioned only three blocks of carrier, each measuring 1.25 Mhz in this band in the March auctions even though it had as much as 12.5 Mhz spectrum in certain circles.

It has also asked the reason for seeking a floor price for pan India rather than that for 14 circles which was DoT's previous query.

Finally, it has asked the department whether the airwaves in the 800 Mhz band, which were sold in the March auctions at 50% reduced starting prices, was liberalised or not. Unlike the previous generation of the telecom permits, the Unified Access Service Licence, which limited the use of spectrum to a technology, the spectrum now allotted through auctions under the Unified Licence is technology agnostic.

The regulator has said that it would now float a new consultation process on the matter and solicit the views of the entire industry and public at large.