Fallout of 2G scam, ISRO-Devas Multimedia deal

In the wake of severe criticism over two major controversies involving the distribution of precious spectrum — 2G spectrum allocation in 2008 and S-band spectrum in the ISRO-Devas Multimedia deal — the government is considering a pricing mechanism for non-commercial band that is used by government departments.

A similar process is also on for the spectrum used for satellite and terrestrial communication links, mainly used by space, defence and other strategic organisations.

“Pricing of spectrum should be delinked from the issue of licence. Spectrum pricing should be determined in such a way that the primary objective of increased penetration of telecom services and availability to consumers are not lost sight of. The pricing policy of spectrum in non-commercial bands and those used in satellite and terrestrial links should be relooked to ensure that spectrum is efficiently utilised,” says a Department of Telecom's (DoT) report prepared by the working group on the Telecom sector for 12th Five Year Plan (2012-17).

This report is crucial in the preparation of the sector's growth path.

While the DoT is yet to finalise the prices of 2G spectrum as it needs to charge mobile operators who hold extra radio waves beyond their contractual limit, the pricing of non-commercial spectrum would not only help the government exchequer earn extra revenue but also prompt government agencies to go in for more efficient use of radio frequencies.

Till now, only spectrum used for commercial purposes by telecom operators was being priced. But now, government departments such as railways, defence, police and paramilitary forces, ONGC and Power Grid, which are allocated spectrum by the DoT's Wireless Planning and Coordination (WPC) Wing, the National Radio Regulatory Authority — responsible for frequency spectrum management — for internal use, free of charge, will have to shell out money.

The Telecom Regulatory Authority of India (TRAI) has also recommended pricing of all kinds of spectrum in order to streamline the mechanism of allocating radio waves.

Even the Department of Space, whose Bangalore-based arm — the Indian Space Research Organisation (ISRO) — was mired in controversy last year over allocation of the precious S-band spectrum to private firm Devas Multimedia at throw-away prices and had to cancel the contract later, would also have to pay for getting spectrum from the DoT.

The ISRO, which got the S-band or 2.5 GHz band spectrum for free, gave away 70 MHz of it for just over Rs.1,000 crore. Interestingly, the DoT had asked BSNL and MTNL to pay Rs.12,847 crore for just 20 MHz of the similar spectrum used for providing mobile broadband services using fourth generation (4G) technologies such as WiMax and Long Term Evolution (LTE).

The report also asks the DoT to make available around 320 MHz of additional spectrum in the next five years and take actions so that another 180 MHz will be made available in the 13th Plan period (2017-2022).

Similarly, the DoT has been asked to go for re-farming of spectrum (a process where frequencies are reallocated for more efficient use of radio waves for various services), besides conducting spectrum audit, which will be the first such exercise to be undertaken by the DoT since the boom in the telecom sector more than a decade ago.

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