What is spectrum in telecom?

Answer 1

Wireless communications make use of the radio portion of the electromagnetic spectrum. Simply put, telecom operators send and receive signals at various frequencies to enable communication. This radio spectrum contains only a limited number of frequencies.

Signals can be sent on different frequencies all at the same time, however, if frequencies are the same or too close they can interfere with each other.

As the number of frequencies is limited, they need to be allocated to different service providers. Therefore, spectrum is allocated for various communication purposes world-wide. Is spectrum being given free to telecom operators?

Contrary to popular perception, spectrum is not available for free. Currently, spectrum charge has two components - the entry fee charged is inclusive of one-time spectrum charge, and an annual spectrum charge based on a percentage of the Adjusted Gross Revenue (AGR) of the telecom company.

The percentage of annual spectrum charges for GSM operators, for instance, varies with spectrum usage. Currently, the ceiling for annual spectrum charge is 6% of AGR. Trai, though, has recommended that the ceiling be lowered to 4%.

Now, Trai's recommendations only say that there will be no one-time spectrum charge for allocation of IMT-2000 spectrum (meant for 3G) for existing service providers. The regulator has explained that the allocation to the existing operators should be viewed as extension of 2G spectrum allocations. However, a contrary view is that spectrum is a scarce resource and that additional allocation should be priced.

Regards,

Kanak

New Delhi