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Vodafone India has raised the issue of wastage of spectrum and lack of alignment between spectrum allocations and charging regimes with regulator TRAI. In its communication to TRAI, Vodafone has emphasized that change of allocation block size from the earlier 200KHz to the 1.25MHz in 1800 bands in the November auctions has resulted in a situation where spectrum is both unwillingly wasted by operators and unintentionally left idle by the Government.
"TRAI is already aware that the only widely-deployed commercial technologies in the 900 MHz and 1800 MHz bands are GSM and UMTS (WCDMA) for the former and GSM and LTE for the latter. Moreover, the most common deployment of these bands worldwide is for GSM and in India till date, this is the only deployment in the 900 MHz and 1800 MHz bands", said the telecom operator
"A block size of 1.25 MHz causes immense wastage of spectrum in many cases. Idle spectrum is an inefficient waste of scarce national resource, which cannot be afforded in difficult economic times. Furthermore, the block size of 1.25 MHz is out of alignment with the current SUC slabs, which were formulated on the basis of a block size of 200 KHz for 900 MHz and 1800 MHz bands. Due to lack of alignment between spectrum allocation and charging approach, operators/licensees who acquired spectrum in the November 2012 auctions have ended up paying higher spectrum usage charges compared to competitors"
"For example, a licensee who acquired 5 MHz in the November 2012 auctions will not only waste 0.05 MHz in every carrier if the spectrum is used for GSM, but also pay a higher SUC compared to the other operators. Similarly, service providers like Vodafone, who acquired additional spectrum in 14 circles in November 2012, end up paying higher SUC even as part of the acquired spectrum is wasted due to the carrier block size of 1.2 MHz. This results in discrimination and a non-level playing field", adds Vodafone
In the view of the above, the telecom operator submits that there are compelling reasons to review the block size of 1.25MHz and revert to the allocation of spectrum in carrier blocks of 200KHz.
Vodafone says, the authority in its consultation on reserve price of spectrum should be consistent with the well-established past practice of spectrum being auctioned in 200 KHz lot sizes. This will introduce no additional complexity to the auction, but will eliminate all of the inefficiency and wastage inherent in auction in block sizes of 1.25MHz.