Ncell has got the additional spectrum in 1800 MHz that the company had won around two months ago with auction. Nepal Telecom and Ncell participated in the first ever spectrum auction of 1800 MHz, out of which Ncell came as a winner by bidding the highest price per MHz. But NTA has put many conditions (future rollout plan) to the private company in exchange for the spectrum.
NTA board on Friday has decided with the award of the additional frequency in 1800 MHz spectrum, with different terms to be fulfilled by the company. The decision came to light on Monday after all of the members signed on it.
The Public Account Committee of the Parliament had recommended to provide the additional spectrum to Ncell, only after the full payment of their liabilities including the Capital gain tax.
Additional spectrum
As per the existing spectrum policy, a telecom company can hold a maximum of 20 MHz frequency in 1800 MHz. Ncell has been using 11 MHz of the respective band, they can only get 9 MHz additional spectrum. So, being aware of it, Ncell demanded the 9 MHz and NTA board also decided to award the same 9 MHz to the company with preconditions.
Conditions
The conditions that NTA has submitted to Ncell are:
- Ncell should expand their 4G to all the district headquarters within 2020. (which Ntc has met recently with more than 2000 4G towers in all districts)
- Ncell should expand 4G covering 95% of people in the city areas within 2020.
- In case of villages, Ncell should expand their 4G to all village bodies within 2022. So, they should reach out to 95% of people in rural areas with their 4G service.
- Ncell should cover 95% of tourist areas including highways, National park within 2022.
- Ncell should install and operate 3000 new 4G towers across the country within 2022.
- They have also set the 4G speed to meet in the city and rural areas as 20 Mbps and 10 Mbps respectively.
Spectrum Auction
For the first-ever spectrum auction in Nepal, Ncell bid a higher amount than Nepal Telecom to secure additional frequency in the 1800 MHz band. Only two companies Ntc and Ncell were eligible to participate in the spectrum auction of the residual frequency in 900, 1800 and 2100 MHz. Out of this, NTA started the auction process from the 1800 MHz band and Ncell became the successful bidder.
The spectrum auction process started last year for the remaining frequency in 900 MHz, 1800 MHz, and 2100 MHz band. But the process was on hold due to the court’s intervention at first and then due to the Ncell’s CGT case.
As the telecom operators needed to clear all the pending dues to be eligible, the top two telecom operators Ntc and Ncell applied for the first spectrum auction in Nepal.
The base price of per 1 MHz bandwidth in 1800 MHz was Rs 3 crore and 60 lakhs.
Bidding process
The first-ever spectrum auction took place at Soaltee Hotel in the Capital on Dec 18, 2019. The auction took 3 rounds of the bidding process and finally settled with the Ncell’s bid price per MHz at 5 crore and 80 lakhs. The final bid price amount of Ncell is higher than that of Ntc by around 80 lakhs.
In the first round, Nepal Telecom bid the price of per MHz bandwidth at Rs 3 crore and 78 lakhs while Ncell bid at Rs 3 crore and 96 lakhs. Then the base price was increased by 5 percent to the second round. Then Ntc bid at Rs 4 crore 20 lakhs and Ncell bid at Rs 4 crore and 32 lakhs in the second round.
Lastly, in the third round, Ncell bid Rs 5 crore and 80 lakhs while Ntc bid at Rs 5 crore and 1 lakh amount per MHz bandwidth. With the highest amount of bid price, Ncell won the auction to get the additional frequency.
The final price of per MHz spectrum came at Rs 5 crore and 80 lakhs. So, Ncell will pay at the same rate to NTA for the 9 MHz spectrum.
Both the companies got 20 minutes, 30 minutes and 50 minutes time period to submit the sealed bid price for first, second and third round.
Although the bidding process culminated in the Ncell’s win, NTA will provide the additional frequency to Ncell, only after settling the CGT issue with the payment of the allocated amount of Rs 21 Arab and 10 crores.
CG Telecom’s petition
CG Telecom filed a petition to Supreme Court seeking a stay order in the spectrum auction process. As they were not qualified to participate in the first auction, they believe it will do a harm to the company for the long term. But as the court did not decide on the stay order, the spectrum auction went ahead that time.
1800 MHz band
1800 MHz band in the most popular spectrum for 4G technology. Previously the same spectrum was used for GSM (2G) technology only. Now with the grant of technology neutrality license of that band, telecom companies are using the same spectrum for any technology.
Earlier Ncell used a frequency sharing technology to maximize the use of scarce and expensive resources. It has been a year that NTC got 800 MHz spectrum to expand its 4G to all parts of the country. Find the things you need to check before you buy a 4G smartphone.
There is a residual spectrum chunk of 16 MHz in 1800 MHz, for which NTA went for auction. With the limitation in the total bandwidth as per Radio Spectrum Policy, any telecom operator can get up to 20 MHz bandwidth in the 1800 MHz spectrum.
As Ncell now gets the 9 MHz frequency in the 1800 MHz band to reach the 20 MHz threshold, only 7 MHz is left in the most efficient spectrum for 4G. Chances are high that the regulator would provide the 5 MHz out of the 7 MHz to the government owned Nepal Telecom in the same price as that of Ncell. But the question still remains if the telecom operator could get the continuous bandwidth, that is the most suitable one to operate 4G network.
Advantages of more spectrum
Telecom operators prefer more spectrum as they could easily upgrade the capacity of the mobile network in an effective way. So, after getting the additional spectrum, we can expect Ncell to increase their 4G speed very soon.
