According to an internal panel of the Department of Telecommunications (DoT), the government?s move to go ahead with spectrum refarming is likely to increase the cost of extending mobile coverage to about 42,000 villages across the country.
The government plans to refarm spectrum in the 900 MHz band as part of which existing GSM operators will be required to surrender the spectrum held by them in this band. In order to continue providing services in the existing circles, GSM operators will have to either rebid for spectrum in the 900 MHz or buy spectrum in the 1800 MHz band.
According to the DoT panel, the equipment costs will increase in case a GSM operator is awarded spectrum in the less efficient 1800 MHz band. The government plans to extend mobile coverage to 42,311 villages for which operators will have to spend as much as Rs 38 billion for providing telecom services using spectrum in the 900 MHz band.
The uncovered villages will be provided telecom services in a phased manner over a period of three years. The project will be financed by the Universal Services Obligation Fund (USOF). However, DoT is of the view that the additional costs of establishing a telecom network following refarming should be borne by operators. The move is being opposed by service providers on the grounds that additional investment will further impact telecom industry which is facing huge debt.
