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Telecom commission clears norms for spectrum trading

Final notification awaited as the guidelines will now be referred to the Cabinet.

By: ENS Economic Bureau | New Delhi |
June 12, 2015 2:54:51 am
Telecom Regulatory Authority of India, TRAI, spectrum trading, spectrum sharing guidelines, Telecom Commission, Rakesh Garg, business news Trai had stuck to its recommendations on all the points in its final reply to DoT. If still the TC inserts these two clauses, the mechanism would be a non-starter.

Almost 16 months after the Telecom Regulatory Authority of India first submitted its recommendations, the spectrum trading and sharing guidelines were approved by the Telecom Commission on Thursday. However, the final notification is still awaited as the matter would now be referred to the Cabinet for a final nod.

“We have finalised the view on spectrum sharing and trading guidelines. We will try to send the norms to the Cabinet by the end of this month,” department of telecommunications secretary and Telecom Commission chairman Rakesh Garg said after the meeting. While technically the matter does not require the Cabinet’s nod since the Telecom Commission itself is an inter-ministerial body, the latter still has decided to seek its approval.

Though Garg did not disclose to what extent the final guidelines approved by the TC differed from the ones originally sent by Trai, going by the back reference to the regulator it seems that there won’t be any large-scale departure from the original set of norms. The queries sought by the department of telecommunications were very incremental barring two points where it wanted to know whether in the case of sharing administratively acquired spectrum the companies should be made to pay market price for the spectrum.

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In another case, it wanted to know whether this facility should be extended to operators only once they have paid the government their dues for excess spectrum held beyond 4.4. MHz in GSM and 2.5 MHz in CDMA. Trai had stuck to its recommendations on all the points in its final reply to DoT. If still the TC inserts these two clauses, the mechanism would be a non-starter.

However, if notified in its original form, the trading and sharing guidelines would be progressive and help operators in consolidating spectrum. However, it comes quite late. Further, the spectrum caps would act as a major deterrent barring sharing between two big operators across circles. It is only smaller operators who would benefit by pooling their spectrum, which would not require them to set up more cell sites.

Comparatively, trading would be beneficial for the bigger operators as it would lead to targeted merger and acquisitions. For instance, an operator wanting more spectrum in, say, 3G can now buy it from another operator having spectrum in the same band but not having enough use for it.

This way the first operator does not need to buy the second company lock, stock and barrel. However, any action on this front would come only once the target company has fulfilled its roll-out obligations or else this requirement would fall on the buyer. FE

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