Bharti Airtel and Vodafone India have failed in their bids to have spectrum licences extended for 10 years, which would have avoided them giving up airwaves for an upcoming auction.
According to The Economic Times, the two largest operators in India sought the licence extension in return for a price to be determined by February’s auction for similar spectrum. However, the Indian Supreme Court ruled that this is no longer possible.
The Indian government wants to auction the spectrum to determine its correct market value. As a result operators will have to compete for spectrum and run the risk of ending up with no spectrum in circles where they don’t have fallback options.
Airtel will have to renew licences in six circles and has no spectrum to fall back on in two circles. Vodafone will have to renew in seven circles, and must win in four.
Vodafone’s lawyer argued in court that the government issued the existing licences with the promise that they could be extended by 10 years if it was deemed beneficial. The company is now being told it must surrender the spectrum for the auction.
The two companies plus Idea Cellular have also challenged the government’s new telecom policy, which unbundles spectrum from licences.
In October, Vodafone requested that its existing licences for spectrum in the 900MHz band be extended for six months after new spectrum in the 1.8GHz band is allocated.
Existing 900MHz airwaves are to be replaced by spectrum in a slightly different part of the spectrum band, with the amount of 900MHz spectrum in use actually falling in some markets, according to Vodafone.
The operator said that as the frequency spots on 900MHz and 1.8GHz bands are changing, it is vital that the 1.8GHz spectrum won in the spectrum auction is deployed first to enable the release of existing 900MHz spectrum.
The company said the migration of its network from existing 900MHz to 1.8GHz spectrum in areas where it was unable to renew existing spectrum will take six months.
Airtel also asked for more time to use these airwaves in the event of the new spectrum not being allotted in time.
It was reported last week that the Indian government wants to raise INR648.4 billion ($10 billion) from its forthcoming auction of spectrum in the 800MHz, 900MHz and 1.8GHz bands.