After the government allowed the telecom operators to share their spectrum with one another, Reliance Communications and Reliance Jio are all set to ink a spectrum sharing deal allowing each other to share 800 MHz spectrum across 10 telecom circles.
As per the spectrum sharing rules laid down by the government, only those 2 operators who own the same spectrum in a telecom circle can share their spectrum with each other. Also a telecom operator can tie up with just 1 other telco for sharing its spectrum.
This partnership would allow both RJio and RCom to have 10 MHz bandwidth of 800 MHz spectrum across 10 telecom circles of Mumbai, UP-East, MP, Orissa, HP, Bihar, Assam, Haryana, Northeast, and J&K.
The government has also specified that those operators who have got their spectrum without any auction won’t be able to share their spectrum unless they pay the market rate for the spectrum at the current prices. So, in order to ink its deal with RJio, RCom has applied to the DoT for its permission to let RCom liberalize its old 800 MHz spectrum progressively across 10 telecom circles.
It is estimated that RCom will have to cough up Rs. 1,500-2,000 crore as liberalization fee on pro-rata basis for the amount of duration left till the expiry of its spectrum license across these 10 circles.
Why RJio Needs More Bandwidth Across 800 MHz Spectrum?
RJio has pan-India license for launching its 4G-LTE services on its 2300 MHz spectrum. Now although, the 2300 MHz spectrum is good for carrying high-speed data, it can’t travel for long distances and also has trouble penetrating walls and concrete structures. 800 MHz waves on the other hand, can easily penetrate dense buildings and have less signal strength problems compared to 1800 MHz and 2300 MHz waves.
RJio had also recently acquired 800 MHz spectrum license across 10 telecom circles in spectrum auction held in March 2015 for a cost of Rs. 7,876.42 crores. But out of these 10 telecom circles, RJio only has contiguous spectrum across 4 telecom circles of Mumbai, MP, Assam, and Northeast. Whereas RCom has contiguous spectrum across all of these circles. So, the spectrum sharing deal would help RJio a lot for improving its QoS on its 4G LTE network.
This spectrum sharing decision from the government of India comes at the right time when telecos want more and more bandwidths across spectrums for improving their data speed, reducing call drops, and for improving their Quality of Service.