Airwave switch plan to cost $24 bln more capex: industry

Mobile carriers will have to spend nearly $24 billion more on their networks if the government goes ahead with a proposal to replace the more-efficient spectrum bands of older carriers with relatively inferior quality spectrum, an industry group estimated on Tuesday.

Leading carriers including Bharti Airtel and Vodafone's local unit have been opposing the Telecom Regulatory Authority of India's (TRAI) proposal to refarm, or substitute, their 900 MHz spectrum band with relatively-inferior quality spectrum in the 1,800 MHz band before their permits are renewed starting in 2014.

Such a move would mean they will have to buy new radio spectrum in an auction, and also have to build more mobile masts and replace some of the existing equipment to continue services.

The spectrum switch will force operators write off a total Rs 25,000 crore  worth of assets, as some of their existing equipment becomes obsolete, the Cellular Operators Association of India (COAI) said in a presentation to the telecoms minister.

The COAI represents most of the major carriers. The industry is also opposing the TRAI's proposals for an upcoming spectrum auction, including the auction starting price that is nearly 10 times higher than what carriers had paid in a 2008 state grant process.

The Supreme Court in February ordered cancellation of all telecoms licences granted in the scandal-tainted 2008 sale and asked the government to redistribute airwaves through an open auction by August.