India's Tata Teleservices will give up a portion of its mobile spectrum in certain areas to avoid having to pay a one-off charge to the government. It then plans to funnel the savings into improving its existing network.
The government is levying a fee on all spectrum held by CDMA operators in excess of 2.5 MHz. Tata says it will hand back any frequencies it owns above this limit in all circles apart from Delhi and Mumbai, where it will retain its full 3.75 MHz holding and pay the resulting fee.
“Tata Teleservices, under protest and without prejudice, has intimated its decision to the Department of Telecommunications to surrender spectrum in the CDMA 800-MHz (band) beyond 2.5 MHz in all circles except Mumbai and Delhi,” the telco told Economic Times.
It said it would invest in making its network infrastructure more efficient to get the maximum performance and capacity out of its remaining bandwidth, in a market where quality of service issues are rampant because of high mobile uptake and the limited amount of spectrum most cellcos hold.
“The company stands committed to ensuring that this will not adversely affect network or service quality and is looking to deploy additional capex to offset the reduced spectrum availability,” Tata said.
The one-off spectrum charges came into force in India at the start of this year, with the cost per MHz of bandwidth above the 2.5 MHz cap based on the reserve price set for India's March spectrum auction. The DoT has not revealed exactly what the price per MHz for excess bandwidth will be and it will vary by region.