This article delves into the complex narrative of the 700 MHz spectrum band, celebrated for its vast potential in mobile broadband but now mired in a tale of regulatory stagnation and market indifference. Initially destined for commercial success, a significant portion of this band is now allocated to public sector undertakings (PSUs) and government entities for non-commercial use, severely limiting its availability for the intended market-driven applications. This situation is emblematic of a larger challenge facing India’s sub-GHz spectrum bands, which are marked by underutilization or large-scale inactivity. This article aims to explore the bizarre sequence of events that led to the current state of the 700 MHz band, where only a fraction is used for its original purpose, diverging significantly from its commercial objectives, thereby virtually making it impossible to harness the full potential of this valuable piece of spectrum.
A Calculated Misstep: The 2012 Overvaluation of the 700 MHz Spectrum
The journey towards the underutilization of the 700 MHz band commenced with a pivotal oversight twelve years ago, as rooted in the TRAI recommendations dated 23rd April 2012. TRAI’s decision to set an exorbitantly high reference price for the 700 MHz band, quadruple that of the 3G spectrum, was fraught with miscalculations and devoid of rational justification. Details to this effect are available embedded in my note titled – “Pricing Rationale of 700 MHz”. This pricing strategy, surprisingly unopposed by telecom operators, was determined despite the absence of a mature ecosystem or a finalized band plan for the 700 MHz spectrum, which means TRAI ended up valuing a product (700 MHz band) which wasn’t ready with no ecosystem anywhere in the globe. The method adopted by TRAI, which involved a questionable comparison of the 800 MHz auction prices from other countries with the domestically discovered price for the 1800 MHz band, led to a grossly inflated recommendation. This critical misstep, encapsulated in a single paragraph (clause 3.92 of page 104) without adequate justification, has had long-lasting implications on the band’s utility and also raised a fundamental question on “Regulatory Acumen”-
