Mobile phone service providers using GSM technology have urged the telecom regulator not to go ahead with its proposal to count all frequencies under 1 GHz as one frequency for calculating the 50% cap on spectrum holding in a band, saying it could lead to 'monopolisation' by a single operator.
"The proposal....may empower a single operator to acquire disproportionate amount of spectrum in a particular sub-1 GHz band, thereby creating its monopoly," Cellular Operators Association of India (COAI), the industry association of GSM operators, has written in a letter to the Telecom Regulatory Authority of India.
It further argued that any such move would be unfair and amount to changing rules 'midway' for the industry.
ET reviewed a copy of the letter written by COAI director general Rajan Mathews to Trai chairman Ram Sewak Sharma.
The development comes a day after Sunil Bharti Mittal, founder and chairman of Bharti Enterprises, told ET that any such move by the government will create dominance and monopolisation and must be avoided. He had said that instead the government could lift the cap on the overall spectrum holding of a telecom operator to 33% of the total airwaves allotted in the circle from the current 25%.
The telecom regulator had floated a consultation paper over reserve price of various spectrum bands about two weeks ago where it had asked whether the government should treat all sub-1 GHz bands as a single band for the purpose of computing the spectrum caps.
The reason cited was that all these bands are lower frequency bands, all of them have better propagation characteristics, and, hence, they can be treated alike for formulating any spectrum cap for the 'lower frequency' spectrum. It had further explained that since the spectrum being assigned through auction was a
liberalised spectrum, operators could deploy any technology in any band.
COAI, on the contrary, has said, "All spectrum bands (700, 800 and 900 MHz) are not directly substitutable at present, due to distinct ecosystem and propagation characteristics. These bands are presently used for offering distinctive technologies."
Illustrating the example of airwaves in the 800 MHz frequency, COAI has said that presently 12.5 to 16.5 MHz of spectrum in 800 MHz band has been assigned in various circles and the intra-band spectrum cap of 50% restricts any operator from holding more than 6.25 MHz or 8.125 MHz. Abolishing intra band cap, however, will allow the operator to hold all spectrum in the premium 800 MHz band, it said.
With MTS merging with Reliance Communications, only three private operators Reliance Communications, Reliance Jio Infocomm and Tata Teleservices now hold airwaves in the 800 MHz band.
Until now the rules permit operators to buy airwaves so far as their total holding in any specific band whether 800, 900 or 1800 is not more than 50% of the total airwaves allocated in that specific band. The second condition is that the spectrum holding in any band must not exceed 25% of the total airwaves allocated across all bands.
If the regulator's proposal is accepted, an operator will be able to buy all of the spectrum, say, in 800 MHz or the 900 MHz band so long as it does not exceed 50% of airwaves allotted in all the sub-1 GHz bands of 800 MHz, 900 MHz and the yet to be auctioned 700 MHz.