Next round of spectrum auction will begin on January 23, according to the Notice Inviting Application released by the Department of Telecom.

Last date for bidders to put in their application is January 4. Mock auction will be held on January 21-22

However, the NIA is silent on the spectrum usage charge issue. Under existing rules, operators are required to pay a fee for using spectrum. This fee is determined on the quantum of spectrum an operator holds ranging between 1 per cent and 8 per cent of annual revenues. TRAI proposed to change this to a flat fee of three per cent irrespective of the quantum of spectrum.

This has been objected to by broadband players such as Reliance Jio as they pay only one per cent as the spectrum charge and, therefore, would end up paying more if the fee is fixed at three per cent. Incumbent players, including Vodafone and Airtel, however, want the fee to be flat as they pay as much as eight per cent now.

The Cabinet had instructed the DoT to take a final view on the issue before the auction. A decision on this issue is crucial for the bidders. The other concern is the lack of contiguous spectrum in the 1800 MHz band. Only 48 per cent of the total spectrum being put for sale is available in continuous chunks of 5 MHz.

This means that the spectrum given to a winning operator post the auction could be split into 2 or 3 chunks. So an operator could get 2.5 MHz chunk in the lower part of the 1800 MHz band and the balance in the upper part. Such an allocation would make it difficult for operators to offer data services.

While non-contiguous spectrum works for offering voice services, higher technologies need the airwaves to be bunched up together. But there are a few areas where 5 MHz contiguous chunk of spectrum is available. The DoT has developed a ranking system to allocate such airwaves.

>thomas.thomas@thehindu.co.in

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