The report estimates that the implementation of the refarming recommendations, which still require Cabinet approval, will require replacement of 286,590 existing 900MHz base stations with 1800MHz equipment, in addition to deployment of an additional 171,954 new base stations on the 1800MHz band to fill coverage gaps. This will result in incremental capex of INR 547.4 billion and incremental annual opex of INR 117.6 billion. If the extra investment in refarming and the costs of spectrum are passed on to consumers in the form of higher retail voice tariffs, the overall tariffs will go up by as much as INR 0.64 per minute, the report claims.
Analysys Mason said that the current recommendations "lack the rigour and comprehensiveness" of regulatory impact assessment seen in other markets where refarming has been carried out. Key operational considerations such as the timeframe required for such large scale migration of sites, availability of both 900MHz and 1800MHz spectrum during the transition phase, as well as availability of sufficient spectrum to support existing voice traffic along with new technologies such as UMTS/LTE have not been analysed thoroughly in the current recommendations, the market researcher said.
