TRAI’s directive not to allocate 700 MHz band spectrum to incumbent operators is really unfortunate one. This might hit a nasty blow to some of the incumbents like Bharat Airtel, who is reeling under pressure on rising rupee value. Story isn’t different for BSNL, another incumbent, whose financials are reporting losses for quite some time.
First, the logic behind this decision doesn’t seem to be as simple as it appears. According to TRAI, incumbents were allocated spectrum in 900 MHz band, while non-incumbents were allocated 1800 MHz band, resulting into some thousands of crore of losses to later. Apparently, 900 MHz band enjoys less CAPEX investments in terms of telecom sites, due to laws of propagation of frequencies.
But there’re some other things to consider before thinking on same lines:
- Owing to crunch of spectrum in 900 MHz, it’s TRAI/DoT’s responsibility to free up spectrum in that band, to those who didn’t get it.
- If TRAI is planning to re-farm 900 MHz spectrum & allocate 1800 MHz frequencies as replacement, how this directive is going to help incumbents?
- 700 MHz band is considered ideal for LTE/WiMAX rollouts. How many of the non-incumbents are capable of those roll-outs at this stage? Some of them even don’t posses 3G Spectrum like Uninor, while rest of them didn’t bid for BWA during earlier auctions.
- Incumbents were allocated 900 MHz spectrum as they were early movers in the market. Look at Bharti Airtel. Even Idea Cellular has equal advantage of owing 900 MHz band spectrum in some of the high profit making telecom circles like MH & Goa. If being first mover in the industry is going to be punishment at later stage, why would someone invest in such a hostile & uncertain environment?
Telecom natural resource aka spectrum is owned by government. The lack of policy over spectrum management had dire consequences over growth of telecom sector. Why can’t DoT/TRAI disclose unified telecom spectrum policy rather than pushing individual band agenda like 700 MHz?
TRAI’s is again failing to understand the consequences of such discreet moves. Though TRAI has assured that incumbents might get space in 700 MHz band at later stage, does TRAI guarantee it? If TRAI is talking about level playing field for all, then it must understand that telecom industry itself isn’t a level playing field. Few early movers had enormous advantage in terms of subscriber growth & revenue, while rest of them has to struggle to establish. And if making policies more amenable to non-incumbents will compensate for early mover’s advantage, then it would also hamper the prospects of incumbents to large extent. It’s just the point when you entered into market. How much TRAI’s going to play against market forces?
In India, as I always said, policy has brought more disruptions & little peace. TRAI must let go the past & bring new things keeping benefit for all & not for few. You can’t keep on correcting earlier mistakes by making new mistakes. This is not what we call ‘Level Playing Field’.