The 700MHz band airwaves are considered more efficient than any of the bands - 800MHz, 900MHz, 1800MHz, 2100MHz and 2300MHz -allotted in India so far because of their better propagation characteristics, which means better coverage and faster data speeds.
Given their spectral superiority , it's a nobrainer that the floor price for the 700 MHz airwave auction will be higher than in any sale so far, an argument the Trai cited while setting the starting price of the 800 MHz band at a level exceeding the winning auction price in the 1800 MHz band.
However, experts feel the biggest complication with buying airwaves in the 700 MHz band is the lack of an ecosystem, similar to the 4G airwaves in the 2300 MHz band that were sold as broadband wireless spectrum in the 2010 auctions.
The structure of the Indian 700 MHz band is different from that of Europe, USA and China.
"The problem with the Indian band is that globally the only two devices which work on this band structure are produced by HTC and are functional in Australia and Taiwan. These are both priced above $500," a senior executive at a telecomequipment manufacturing firm told ET on condition of not being identified.
Rajan Mathews, director general of the Cellular Operators Association of India, the GSM industry body , said that's the reason service providers would like the government to spell out the road map soon, so that equipment manufacturers and vendors can gear up to develop networks. "Only once large-scale manufacturing happens can we get more competitive price points and for all that, the government needs to give out signals loud and clear that it will auction this spectrum in the next two years," said Mathews.
While optimistic that operators need the valuable airwaves, Mathews said timing is critical and so is the floor price, especially because the Indian telecom industry already runs a debt burden of Rs 2 lakh crore, taken mainly to pay for bandwidth and network expansion.
After a bruising auc tion in February and another round of auctions for 900 MHz and 1800 MHz airwaves due later this year or early next, the financial toll of adding 700 MHz spectrum any time soon would be heavy.
Brokerage Deutsche Bank said the potential payout for No. 1 carrier Bharti Airtel, No. 3 Idea Cellular and No. 2 Vodafone is estimated at Rs 29,700 crore Rs 26,400 crore, and Rs 31,400 crore, respectively, for spectrum they won in the February sale and what they will win in the upcoming sale.
Mathews said operators need spectrum and the lower the frequency, the higher the efficiency, but that shouldn't mean the government necessarily pegs this spectrum at an even higher price "because this spectrum will need larger investments in setting up the networks and developing the devices."
Telecom gear maker Nokia Networks, an ardent believer in the spectral efficiency of the 700MHz band and its future along with the 1800MHz band for mobile broadband, agrees that in the immediate short term, the 3G band of 2100MHz will be the main carrier for mobile broadband.
"700 and 1800 are the world's most popular and efficient ecosystem but from the Indian market point of view, it will take some time before the LTE can be successfully deployed as the main mobile broadband frequency," said Sandeep Girotra, VP and head of Nokia Networks, India region.
http://timesofindia.indiatimes.com/followceleb.cms?alias=TRAI,telecom department,DoT,3G band
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