NEW DELHI: The telecom auctions in February will see the sale of only 5MHz of 3G spectrum , a dampener to the telecom industry, which was pitching for availability of at least 20 MHz as suggested by regulator Trai . Although the government moved ahead with the process of procuring an additional 15 MHz of spectrum through creation of an exclusive defence band for the armed forces, the exercise will easily stretch beyond one year.

The Cabinet approved the creation of the defence band and a defence interest zone — running up to 50 kms from the country’s borders — though the issue of finalizing reserve price for 3G spectrum was not taken up. “This matter (defence band) had been pending for the last eight years and we have worked hard for sorting this out,” telecom minister Ravi Shankar Prasad said.

But, availability of only 5MHz of 3G spectrum came in as a setback for the operators who wanted more. Regulator Trai and top telcos such as Bharti Airtel, Vodafone, Idea Cellular and Reliance Communications had said that the amount of available spectrum for auctions should be high to ensure that bids are at sober levels and there is no unnecessary exuberance within the highly-indebted and leveraged industry to bag the coveted airwaves.

“This is a recipe for disaster and certainly disappointing. What is the reason for the delay in releasing additional 3G spectrum when there is an in-principle agreement with the defence forces and Trai also agrees with it,” Rajan Mathews, director-general of industry body COAI told TOI.

Sanjay Kapoor, chairman of Micromax and former CEO of Bharti Airtel, said limited amount of spectrum availability will mean that consumer experience on 3G will continue to be patchy. “Also, the reserve prices may go up in the future as prices arrived at in the upcoming auctions will be the new reference points for fresh auctions.”

The auctions, which will also see the sale of spectrum in the CDMA band of 800 MHz apart from GSM bands 900 MHz and 1,800 MHz, are a do-or-die exercise for some of the telcos, who will lose licences in crucial circles. Apart from a single block of 5MHz spectrum in the 3G band of 2,100 MHz, the government will sell 103.75 MHz in 800 MHz band, 177.8 MHz (in 17 circles) in the 900 MHz band and 99.2 MHz (in 15 circles) in the 1,800 MHz band.

Prasad, who has been meeting defence minister Manohar Parrikar over the creation of a defence band, said the government has identified 49 slots of spectrum between 3 Mhz and 40 Ghz band. “Of this, nine slots have been identified for exclusive use by the Defence, while in 31 other bands, different users like telecom firms, broadcasters, civil aviation and space would co-exist. For the remaining nine, a group has been formed to sort out issues between various user ministries.”

The Cabinet also approved swapping of 15 MHz of 3G spectrum between Defence and the Telecom Ministry. However, government will be able to provide it after completion of the harmonization process. “The band in the 1700- 2000 MHz is required to be harmonized which is to be done in a period of one year,” Prasad said.

