A new spectrum deal for the telcos is set to kick off on Friday with the biggest winners getting access to a new slice of the national fibre-optic broadband network.
The telcos have been busy laying the groundwork for the new deals, which have already been signed by more than 50 of the nation’s largest telcos.
They are hoping that by signing the new deal, they will reap more benefits than they can possibly imagine, particularly if they are able to use the new fibre-to-the-premises (FTTP) technology, which will be rolled out in the country in the next two years.
The new spectrum agreements will give telcos access to new and existing copper-based broadband networks, including those on the network of the Indian National Telcom Ltd (INTEL), which is the backbone of the country’s telecommunications network.
This spectrum will help boost the countrys broadband penetration, and boost its economy as it has in the past.
Telecoms are also hoping that the new agreements will be worth more to them as the telco operators will be able to access more spectrum, as they can now do, than they are now.
This is the first time that India has been able to tap into its own national network, said Anil Agrawal, president of the Cellular Operators Association of India (COAI), which represents telecom companies.
He added that this will help the telcoms expand their network in India.
Telecos are also looking to expand the network that they have in the last few years, which has seen the growth of its internet-based services such as Whatsapp, and Skype.
They want to tap the new fiber-optics network that will be created to give these services the same level of speed and capacity.
“This will help to build India’s fiber-to the node (FTTN) network, and the new capacity will be very beneficial for our companies,” said Vijay Gupta, chairman and managing director of Telenor India.
“This will also be good for us as we will be making the transition from traditional copper networks to FTTN.
We want to be ready to deploy our FTTN network as quickly as possible.”
This will enable the tels to scale up their services.
The big winners in this spectrum deal will be the Indian Cellular Association (ICAI), and the Bharti Airtel, which is owned by Reliance Communications.
These two companies will each be able tap the existing spectrum of a Telenora facility that will cover over 100,000 premises across the country.
Reliance’s FTTP network will be installed in a facility that is set on the southern side of the city of Bengaluru, which it is already planning to build.
In addition, the Telenoras will be allowed to tap any portion of the existing Telenara spectrum that they need to build their new network.
The telcos will also get access to other Telenaria spectrum that will enable them to deploy broadband to other parts of the world.
The deal will cover around 75,000 households in Bengaluru and around 2,500 households in the neighbouring state of Madhya Pradesh.
The other big winner in this deal will also come from Reliance.
The company, which owns India’s biggest telco, Bhartis, will be getting access for a fee to the newly-created spectrum.
The spectrum deal with the teles will cover a chunk of the 4.2-billion-strong telecoms market in India, but only 20 per cent of the market.
This means that in the coming years, Reliance will get access only to around 1 per cent and Bhartip will be limited to only 10 per cent.
The total value of the spectrum that Reliance has will be about $200 billion, according to the telecom companies’ latest financial report.
The deal with Reliance, which acquired the telecoms operator in December, will also allow the telnet companies to use a portion of their spectrum that was acquired through the previous spectrum auction.
In return, Reliant will have the right to make the spectrum available to other telcos, and will be entitled to make a cut of the total value for that spectrum.
Telenora, the telenora’s parent company, is likely to get the most benefit from this deal.
It will be eligible to use around 30 per cent spectrum that is now being reserved for its existing footprint in the national network.
Reliant and Bhartedip will get the remaining spectrum.
In the last deal with telcos and carriers, the spectrum was allocated to Telenota, a subsidiary of Reliance Industries, for an undisclosed amount.
Reliancy also got access to the spectrum for free, and is now building a network of its own.