Global Scenario<\/strong><\/p>

The adoption of 700 MHz spectrum is growing around the world because of its inherent advantages. The US auction for 700 MHz called \u201cAuction 73\u201d raised $19.6 billion in 2008. Verizon and AT&T contributed $16.3 billion while Google was also a major bidder. The Canada auction for 700 MHz sold 68 MHz of spectrum for $5.27 billion in 2014 which is $1.98 per MHz-population. In Germany, 6 blocks of 2x5 MHz were sold for about \u00a31 billion with price paid per MHz-population being \u00a30.21. Japan, New-Zealand, Australia and Jamaica are other global countries that have realised the spectral efficiency of 700 MHz band and are planning for spectrum auctions.<\/p>

High Value Band<\/strong><\/p>

\u2022 Wide Coverage:<\/strong> The coverage of 700 MHz is 0.95 km2 in the dense urban and 2.84 KM2 in the urban areas while suburban and rural coverages are 22.16 KM2 and 140.37 KM2 respectively. It is 5 times more efficient when compared to 1800 MHz which has a coverage of 37.71 KM2 for the rural areas and twice as efficient as the 900 MHz. Considering that about 65% population lives in the rural parts of India and looking at the increasing adoption of mobile phones, the importance of 700 MHz spectrum is significantly high.<\/p>

\u2022 Low Capex:<\/strong> It is approximately 70% cheaper to provide mobile broadband services in 700 MHz when compared to 2100 MHz. The no. of base station required will be lower for 700 MHz than the upper spectrum bands which could help in quick network rollout and cost effective service.<\/p>

\u2022 Efficient Network Utilization:<\/strong> The 700 MHz can provide operators more effective spectrum in order to improve the call drop rates as well as the Quality of Service.<\/p>

\u2022 Green Telecom:<\/strong> The Telecom sector consumes about 2.6 billion litres of diesel worth $1.15 billion per annum and produces around 7 million tons of CO2. There will be significant reduction in diesel consumption with lesser no. of base stations required by 700 MHz band.<\/p>

Challenges to overcome:<\/strong> Though there are manybenefits associated with the 700 MHz auction, it also comes with some challenges for the operators, regulators as well as the entire ecosystem.<\/p>

\u2022 Lack of ecosystem:<\/strong> The 700 MHz is a new band for mobile services around the world. The network equipment market is not evolved and there would be interoperability issues with the existing bands. Handset market will need time to evolve as well and the costs are expected to be high in the initial phase.<\/p>

\u2022 Harmonization:<\/strong> Harmonization will be a key issue for 700 MHz band. While the US700 FD-LTE band plan is followed in the US and Canada, the APT700 is followed in the Asia Pacific countries including India, Singapore, Japan, Australia, New Zealand, South Korea, Malaysia and Indonesia endorsed by 3GPP. ITU region 1 which has Europe, the Middle East and Africa is yet to follow a band plan. At the same time, Band Plan overlap can affect the network in the border areas.<\/p>

\u2022 Regional Roaming:<\/strong> International roaming can be difficult because of non-harmonization of the band.<\/p>

\u2022 Domestic Roaming:<\/strong> Domestic roaming can suffer if there is lack of PAN India service in 700 MHz band.<\/p>

\u2022 Premium price of spectrum:<\/strong> The 700 MHz spectrum may earn high revenue for the government while there will be intense competition and demand premium price. Operators cannot afford to skip the band because of its high value discussed above.
<\/strong><\/p>

Despite the high debt of about INR 3.5 trillion faced by the Telecom Industry, telecom companies will have to get the spectrum in 700 MHz \u2013 to cater to rural\/remote areas which still lack fixed\/mobile coverage, to service the data hungry applications and services and the growing appetite for data, to provide high quality voice services in the Indian voice market that still gets about 80% revenue from voice services, to decongest networks and improve the quality of service addressing the issue of call drops. However, since the ecosystem of devices, equipment, etc. of 700 MHz band is still evolving and looking at the highly stretched financials of the telcos, it might be pragmatic to have the spectrum auction in this band when the Industry has matured to handle it. Considering the economic and social benefits that 700 MHz band could bring to the society, the Government could also consider innovative business model and give the spectrum to operators for faster evolution of the ecosystem.<\/p>

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