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The Department of Telecom has cleared the applications submitted by 8 telecom players but has restricted Vodafone and Reliance Communications from bidding for pan India spectrum. While Vodafone cannot bid for 7 circles, RCom has been kept out of 8 circles. Tata Teleservices cannot bid for spectrum in Delhi.
Other players including Airtel, Reliance Jio, Idea Cellular, Aircel and Telewings have been allowed to bid for spectrum in any circle across the country.
RCom has been disallowed to bid for spectrum in the 8 circles where it operates GSM services through a subsidiary Reliance Telecom. These circles are Assam, Bihar, Himachal Pradesh, Kolkata, Madhya Pradesh, North East, Orissa and West Bengal.
Vodafone cannot bid in Assam, North East, Bihar, Himachal Pradesh, J&K, Madhya Pradesh and Orissa.
The battle for spectrum is expected to be intense this time. The renewed enthusiasm among the existing operators is primarily driven by two factors. One, the reserve price has been reduced from earlier rounds and, two, a number of licences are set to expire this year.
Since the Government has decided not to extend the tenure of the 20-year licences, operators such as Airtel, Vodafone and Idea Cellular have no choice but to bid for spectrum, especially in the 900 MHz band.
Therefore, while the Government plans to sell spectrum in the 1800 MHz and the 900 MHz bands, it is the latter that is attracting interest. The 900 MHz band is superior to 1800 MHz because the higher you go on the frequency band, the lower is the wavelength. In other words, signals sent using higher frequency bands travel a shorter distance than signals sent on a lower band.
This characteristic also makes signals transmitted on 900 MHz more potent when it comes to indoor coverage. It has been proven that the 900 MHz band provides 30-40 per cent better coverage than the 1800 MHz band.
This makes the band valuable to a company such as Reliance Jio for 4G services. But the Government is selling only 45 MHz of spectrum in the 900 MHz band, which is enough for three operators.
With other contenders, including Tata Teleservices, Telewings and Reliance Communications also in the fray, the bidding for this frequency could be intense, leading to higher income to the exchequer.
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