The battle for India's air waves

Nicole McCormick
21 Jun 2010

India might be the world's hottest mobile market, but it also suffers from limited supply of the most critical resource - spectrum.

Indian operators are managing one of the world's greatest ever rampups in mobile demand with typically less than half the spectrum normally available.

Last month's much-delayed 3G auction finally gave them a chance to grab more precious radio real estate.

But midway through the auction the Telecommunications Regulatory Authority of India (TRAI) dropped its bombshell: under its 2G spectrum blueprint it expects cellcos to pay for frequencies they already owned.

The issue - involving billions of dollars of investment and some of the country's biggest enterprises - is almost certain to end up in court, or before the cabinet, or both.

For more than a year, the industry had been waiting on TRAI's 2G licensing roadmap. When it was finally unveiled on May 11, they learnt the regulator planned to slug them for allocations of more than 6.2 MHz that they had previously been given for free.

Officially, the Department of Telecommunications (DoT) has limited GSM spectrum in a single service area or "circle" to a maximum of 6.2 MHz. To begin with, an operator gets 4.4 MHz of spectrum for free in a circle with an operating license. When the operator reaches certain subscriber targets in a given circle, it can apply to increase its allocation to 6.2 MHz.

But on an ad hoc basis, between 2003 and 2006 the DoT allocated up to 12.4 MHz - twice the license quota - to GSM900 incumbents, including Bharti Airtel, BSNL/MTNL, Vodafone, Idea Cellular and Aircel.

Even 8-10 MHz of spectrum (only MTNL has 12.4 MHz of spectrum in both Mumbai and Delhi) is substantially lower than global norms of 15-20 MHz per operator for 2G.

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