The Department of Telecommunications (DoT) has proposed eliminating the system of auctioning spectrum.

The proposal, circulated for wider discussion within DoT, has pitched for a system in which a group of stakeholders or an independent body will hold all the available spectrum and the companies will pay according to usage.

DoT has suggested the system be used for spectrum in the 700 MHz band, expected to be used for 4G services, and also the 900 MHz band, a portion of which is already with 2G operators.

At present, a large part of the 700 MHz spectrum is being used by public broadcaster Doordarshan. DoT has already sought vacation of this band for operators. The move to shift to the use-and-pay system, DoT says, is expected to ensure more efficient use of spectrum. It will also reduce the huge capital costs that operators have to bear for buying spectrum in auctions. These costs ensure the companies cannot lower rates.

The 900 MHz band is being used for GSM mobile services, while there is about 108 MHz spectrum in the 700 MHz band, of which 24-48 MHZ is with government agencies and 36 MHz is being used for commercial services. The rest is with Doordarshan.

The proposal points to a few problem areas in spectrum allocation, the most important of which is fragmented allocation due to the presence of too many operators.

The model is on the lines of OpenNet in Singapore, a joint venture between four companies – Axia NetMedia, Singapore Telecommunications, Singapore Press Holdings and Singapower Power Telecommunications.

The government is already talking of allowing spectrum-sharing, owing to the scarcity of this resource. However, the Telecom Regulatory Authority of India has been looking at using the 700 MHz spectrum for 4G operations.