The empowered group of ministers (EGoM), headed by Finance Minister P Chidambaram is likely to take the final decision on the recommendations of the Telecom Commission regarding spectrum re-farming in the 900 Mhz frequency band, a move that is being widely opposed by the industry. Department of Telecom (DoT) has recommended existing operators surrendering the entire spectrum in 900 MHz band at the time of their licence renewal in 2014.
DoT in its meeting had discussed three alternative proposals one that envisaged retention of up to five MHz of spectrum, another retention of up to 2.5 MHz and the last of re-farming of the entire spectrum.
The recommendations of the commission will be put before the EGoM and if the government goes by the DoT recommendation, the incumbent telcos will have to surrender all spectrum in the 900 Mhz band and then will have to bid for the same spectrum at new, much higher prices, shelling out anywhere between Rs 60,000-70,000 crore by each GSM operator. Existing operators will be allowed to bid in the auction of the 900 MHz band, likely to be held in the first half of 2013, before their licence renewal and if they are successful, they can retain the spectrum. Else, they will be given 18 months to move to 1800 MHz where they will be offered equivalent spectrum what they owned earlier.
TRAI, the telecom sector regulator too in 2010, had recommended re-farming of the 900-MHz band, as globally it was being used for 3G services and was a valuable band that should not be used uneconomically to give 2G services and the Cabinet has already permitted re-farming as part of the new telecom policy.
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