- Star Gold Select HD partners select DTH ops to showcase ‘Mughal-E-Azam’ in colour, B&W
- ALTBalaji offers subtitles for its original shows in three regional languages
- Unitech Moves Supreme Court Against Government Taking Over
- Court sends accused to police custody for two days in actress case
- UP shocker: 15-year-old cancer survivor gang-raped, then raped by passerby too
How 700 MHz spectrum auction can impact the business of MSOs and LCOs
MUMBAI: In the cable TV land, a quiet development is taking place whose implications will become clear in a few years. Telecom operators are set to inhabit spectrum, which has traditionally been used by cable TV operators to offer TV channels and broadband services to their subscribers.
For the first time, the government will be auctioning 700 MHz spectrum (called the upper UHF band) to telcos so that they can expand the coverage of their wireless broadband services. The next round of spectrum auction will also add an estimated Rs 5.3 lakh crore to the government exchequer, with Rs 4 lakh crore alone expected to flow from the 700 MHz auction if all airwaves under this get sold at the TRAI-suggested price.
Given the proposed allocation of the 700 MHz spectrum to the telcos, cable TV companies fear that this will lead to interference of signals in the coaxial pockets of their networks. Though the optic-fibre part of their networks has expanded and digitisation consumes less bandwidth, the last mile to the consumer homes is co-axial. This is where the spectrum utilisation by the telcos will affect cable TV and broadband services.
Multi-system operators (MSOs) may not be feeling the pinch immediately. They mostly do not use this band of spectrum at this stage. However, future expansions in terms of value-added services and the number of TV channels on offer will become problematic.
“We are concerned about the government’s decision to auction 700 MHz spectrum. Under the All India Digital Cable Federation (AIDCF), we are contemplating future steps,” said Hathway Cable & Datacom MD and CEO Jagdish Kumar.
The government’s decision to auction the 700 MHz spectrum has, in fact, caused a lot of disquiet in the cable TV sector.
“Any allocation of spectrum on the frequency band where cable TV operates will have serious implications for the quality of service and business of MSOs and local cable operators (LCOs),” said Siti Cable Network chief operating officer Anil Malhotra.
MSOs have realised, albeit late in the day, that the auction of 700 MHz will be a big loss for the cable TV sector as a whole. The move will jeopardise their plans to provide video-on-demand services, TV channels beyond 500 and high-definition (HD), UHD and broadband services, a senior MSO executive said. “The use of the spectrum till 850 Mhz is a need for the cable TV industry,” he added.
However, the 470-700 MHz spectrum is the most precious band for the cable TV operators as most of their services depend on those frequencies. Though this band will not be up for sale in the upcoming round of spectrum auction, the fear is that the government may be lured by the revenue earning potential to change its position in future.
“The auction of 700 MHz is bad news for us. It is like letting go of one room. We don’t know when we will have to let go of the other rooms as well. The government may be tempted to auction spectrum below 700 MHz,” the head of an MSO said on condition of anonymity.
A number of countries in the Asia Pacific (APAC), Middle East, Europe, America and Latin America have adopted the 700 MHz (698–806 MHz) band as a prime band for Long Term Evolution (LTE) or 4G technology.
Caught completely off-guard, the MSOs are running from pillar to post to somehow convince the government of not going ahead with the spectrum auction as it will hamper their long-term growth.
The government, however, is eyeing windfall from spectrum auctions. As per the spectrum price proposal by the Telecom Regulatory Authority of India (TRAI), the auction may fetch the government Rs 5.36 lakh crore. The auction of 700 MHz spectrum alone is expected to contribute over Rs 4 lakh crore.
The AIDCF, the apex body of the country’s leading MSOs, has already made representations to the Ministry of Information & Broadcasting (MIB) and the TRAI. It is planning to make a detailed presentation to the Department of Telecommunication (DoT) on the matter.
According to GTPL Hathway COO Shaji Matthews, the move to auction 700 MHz spectrum will have ramifications for the cable TV industry.
“They are saying that wired cable will not get disturbed. But the problem is that the networks laid by the LCOs are not fibre. Had the last mile being laid with fibre, it would have been fine. If the last-mile cable were perfect, this would not have bothered us. The use of 700 MHz for mobile broadband will cause disturbances at the operator’s end,” Matthews said.
Siti Cable Kolkata director Suresh Sethiya said that the MSOs would have to compress the signals further to carry more channels. “I think the government should not auction the 700 MHz spectrum because we will need more bandwidth in the future for HD, UHD and broadband.”
ZEEL president (legal and regulatory) Avnindra Mohan said that the company would explore all legal options should the government decide to go ahead with the auction.
Incidentally, ZEEL was the only media company that submitted its response on TRAI’s consultation paper on ‘Valuation and Reserve Price of Spectrum in 700, 800, 900, 1800, 2100, 2300 and 2500 MHz Bands’.
The company has strongly opposed any move to auction the 700 MHz spectrum, contending that it would disrupt the entire cable and TV services provided in India, including the process of digitisation in Phases I, II, III and IV. It will also affect broadband services being provided or proposed to be provided via cable.
ZEEL noted that the proposed allocation in 688–806 MHz would directly interfere with the data carried on cable. In addition, this will also interfere with digital and analogue TV channels.
According to ZEEL, TRAI has failed to mention that the bands 450-470 MHz and 698-806 MHz, which comprise VHF, UHF and upper UHF bands, were and continued to be allocated for use of television (terrestrial transmission) and are being used in cable TV throughout the country with a reach of over 300 million cable and satellite (C&S) households.
“The implementation of digital addressable system (DAS) by all major MSOs and LCOs now embodies the delivery of broadband over cable at speeds ranging from 50 Mbps to 100 Mbps. Such broadband is delivered by the use of cable TV frequencies in the band of 460-850 MHz and is now empowering over 50 million homes in India,” ZEEL said.
However, TRAI is of the view that the auction of 700 MHz spectrum will boost the penetration of wireless broadband. Noting that a large proportion of the broadband growth in India comes from wireless segment, the authority stated that 700 MHz band would be extremely useful as an additional band for providing broadband services in the country, particularly in rural areas for widespread coverage.
Better access to education, improved healthcare and financial inclusion are all likely to result from widespread access to high-speed mobile broadband, the authority had said in its recommendation.
TRAI also stated that the auction of 700 MHz band would ease the operational constraints/challenges faced by telecom service providers and add to the public exchequer in the form of auction money and other recurring revenues.