TRAI has issued a consultation paper on setting the reserve price for auction of spectrum in the 800MHz band. This is after the DoT expressed its intention to auction this spectrum along with 900MHz and 1,800MHz, given the government’s focus on fiscal consolidation and revenue loss in case of non-auction of 800MHz spectrum.
TRAI had earlier suggested to DoT to explore alternate usage of this spectrum band and to consider adoption of E-GSM (Extended-Global System for Mobile), given the falling popularity of CDMA (Code Division Multiple Access) technology (800MHz is used by CDMA operators) and the fact that the CDMA subscriber base had fallen by 30% over three years. DoT’s response was that the E-GSM band requires vacation of spectrum by defence forces, which could take time and keeping spectrum in the 800MHz band unsold will lead to loss of revenue.
On spectrum availability, as per data from the DoT’s Wireless Planning and Coordination wing, 97 blocks of 2×1.25MHz of 800MHz spectrum are available (121.25MHz). It should be noted that Tata Teleservices has agreed to surrender 800MHz spectrum beyond 3.75MHz in Delhi and Mumbai and beyond 2.5MHz in other circles. The total amount of 800MHz spectrum available will be 135 blocks of 2×1.25MHz (168.75MHz)
TRAI has focused on several key issues, including the quantum of spectrum, block size, technical efficiency, lower efficiency factor, data growth potential and global benchmarking. Another interesting point is that CDMA has a 25% market share of wireless data revenue (just 5% non-data share) – a reflection that operators use this technology more for data services. Data average revenue/user (ARPU) is also higher for CDMA data than for GSM data. Thus, there is a valid case to determine 800MHz spectrum value based on the growth potential in data services.