Drop Combined Spectrum Cap Proposal for Sub-1GHz Bands: COAI

GSM operators' body COAI Tuesday said the Trai's proposal to have a combined cap for 700, 800 and 900 MHz bands should be dropped as it will lead to spectrum concentration in specific band by single operator, depriving others from acquiring airwaves in a particular band.

In its consultation paper for valuation and reserve price of spectrum in 7 bands for the next round of auctions, Trai has sought stakeholders comments if cap on the spectrum holding within all bands in sub-1 GHz (700, 800, 900 MHz) frequencies be specified and in such a case, should the existing provision of band specific cap (50 percent of total spectrum assigned in a band) be done away with.

The spectrum cap, the limit of radiowaves a telecom operator can hold for providing wireless services, is 50 percent in a spectrum band identified fit for transmitting mobile signals and 25 per cent of the total such spectrum assigned in a telecom circle.

In a letter to Trai Chairman RS Sharma, COAI said, "The industry is deeply concerned over the proposal of a new spectrum cap, which once enforced, may promote spectrum concentration in a specific band with a single operator."

It further said, "It will seriously affect the level playing field and may deprive many operators from acquiring spectrum in a particular sub-1 GHz band. Therefore, this question needs to be dropped from the consultation paper."

COAI said the current cap of 50 percent has effectively served the interest of consumer, competition and industry whereas the proposal of a separate cap in a market of 10-13 players may empower a single operator to acquire excessive amount of spectrum in a particular sub-1 GHz band, creating monopoly.

It also said the new spectrum caps are tantamount to changing rules midway as during the last few auctions when spectrum in 800 MHz and 900 MHz was assigned, the operators were subject to band specific cap rule.

"Has this new spectrum cap implemented during the past few spectrum auctions, operators' cap limits for 900 MHz and 800 MHz would have been different and they would have placed their bids accordingly," Cellular Operators Association of India (COAI) said in the letter.

It said currently, 800 MHz and 900 MHz are held by 3-4 operators due to intra-band cap, but with the proposal, may allow one operators to acquire excessive spectrum in 700 MHz or consolidate airwaves in 800 MHz, which is underutilised to a great extent.

"The majority of industry strongly believes that the proposal of a limited number of operators who may accumulate disproportionate holdings in a particular sub-1 Ghz band, for example, 800 MHz or 700 MHz, will defeat the very purpose of prescribing the intra-band spectrum cap," COAI said.