Page 114 - SAMENA Trends - August 2020

REGULATORY & POLICY UPDATES SAMENA TRENDS

Mobile and China Broadcast Network. Outside China, and outdoor locations in Hong Kong." Two operators,
so far only Japan and Russia have committed to it. China Mobile and HKT, paid HK$120 million (US$15.5
However, in a consultation paper issued Thursday, the million) for each of the two 40MHz of 4.9GHz blocks
Communications Authority (CA) said it believed "local auctioned last October. The CA said it had recently
and worldwide developments" in 4.9GHz adoption vacated 50MHz of 4.9GHz spectrum that was being
would ensure that network equipment and terminals used by government agencies. It proposes combining
would become more commonly available. An even this with 30MHz of reserve spectrum to create two
more significant attraction of 4.9GHz is that it can more 40MHz blocks. It suggests limiting each bidder
be used right across the city. The mobile industry in to a maximum of 40MHz. The new frequencies would
Southeast Asia has been in conflict with satellite likely be most attractive to Hutchison and Smartone,
broadcasters over the 3.5GHz band, which overlaps who have the smallest spectrum holdings overall and
with satellite broadcast services. To avoid interference, the smallest in 5G, with just 70MHz apiece compared
the regulator has set up an exclusion zone in northeast with the 120MHz owned by HKT and China Mobile. The
Hong Kong, covering approximately 10% of the CA paper proposes allocating the spectrum through an
population. As the CA puts it, compared to 3.3GHz and auction as with the other 5G frequencies, and requiring
3.5GHz, "the 4.9GHz band has the advantage of being the successful bidders to provide at least 50% coverage
able to support deployment of 5G services at all indoor within five years. (July 23, 2020) lightreading.com

India’s Supreme Court has indicated that it may require pay the dues instead. In a similar vein, the court has
cellcos that have used the spectrum of bankrupt looked to reclaim the dues of shuttered companies from
providers to pay the Adjusted Gross Revenue (AGR)- the entities that now hold their former spectrum rights.
related dues of those ailing companies, the Economic On Friday, the court claimed that Bharti Airtel should
India Times reports. In a series of hearings over the weekend pay the outstanding AGR dues for Aircel and Videocon
the apex court reaffirmed its intention to enforce the Telecommunication – totaling INR123.9 billion
collection of dues from its October 2019 resolution of (USD1.67 billion) and INR13.76 billion respectively
a decade-spanning argument over AGR calculations. – as the cellco purchased spectrum from the two
India’s telcos pay a portion of their AGR in license companies, and neither firm had paid the dues prior
fees and spectrum charges, but many of the providers to their bankruptcy and closure. Similarly, the bench
named in last year’s decision have long-since closed, claimed that Reliance Jio Infocomm (Jio) is liable to
whilst two more – Reliance Communications (RCOM) pay the AGR dues of RCOM (around INR252 billion) as
and Aircel – have been declared bankrupt and are it utilizes some of the company’s remaining airwaves
undergoing insolvency proceedings. As it has become through sharing deals. The DoT has relinquished its
increasingly apparent that neither of the bankrupt authority to rule on the matter to the Supreme Court,
cellcos nor the other defunct providers will be able to as the court’s current stance contradicts one of its
pay the dues – which include not only the outstanding previous rulings on the matter. Last year, the court had
license and spectrum fees but also penalties and rejected an appeal from the DoT seeking to overturn
interest – the court has begun looking for other parties a decision from the Telecom Disputes Settlement and
to pay the dues. The Supreme Court has turned its Appellate Tribunal (TDSAT) which had stated that the
attention to the spectrum rights of the two companies, regulator would not be allowed to collect RCOM’s from
as the insolvency process hinges on the concessions. Jio based on spectrum the latter had acquired from
The value of both firms is tied to their spectrum the former. The planned deal ultimately collapsed,
rights and any hope for creditors to recoup their however. (August 24, 2020) commsupdate.com
expenses relies on the sale of their airwaves, but the
Department of Telecommunications (DoT) has claimed The Telecom Regulatory Authority of India (TRAI)
the companies cannot sell their permissions on the declared an additional spectrum usage fee only applies
basis that the spectrum is owned by the Indian state. to the specific frequencies shared by two operators
Regardless of the outcome, though, the DoT is unlikely and not to their entire spectrum holdings. The regulator
to be able to collect any dues. If it blocks the sales, the issued its final recommendations on calculating
companies will be forced into liquidation but if it permits spectrum usage charges when airwaves are shared
the transactions to go ahead, it will not be entitled to by two operators. Based on existing guidelines, the
the proceeds from the sales due to its classification as spectrum holders must pay a 0.5 per cent usage fee
an operational creditor As such, the court has begun of adjusted gross revenue (AGR), which is applied to
looking into the use of the spectrum rights held by the the spectrum holding in the specific band in which
bankrupt cellcos, arguing that operators that used the sharing is taking place. To give operators the flexibility
frequencies via sharing agreements should be made to to manage their spectrum based on commercial needs,

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