NEW DELHI: A high-powered panel set up by the telecom regulator is likely to recommend allowing more than two operators to pool in and share both 2G as well as 3G airwaves in a circle, a move that will ease the pressure on operators struggling with congested networks, allows optimum use of the scarce natural resource and possibly reduce bidding amounts in future auctions.
A 15-member steering committee on spectrum sharing, which was set up by the Telecom Regulatory Authority of India (Trai) and which includes telcos such as Bharti Airtel, Vodafone India, Idea Cellular and Reliance Communications, is set to submit its proposals by the end of the month, a person familiar with the panel’s likely recommendations told ET. Once ratified by Trai chairman, the report will be sent to the telecom department (DoT), who is awaiting this report for finalising the clauses of this key policy.
Deciding on spectrum sharing rules and seeking cabinet clearance on bandwidth trading guidelines — both much sought after measures by the industry — figure prominently in the 100-day action plan prepared by the DoT to boost flagging investor sentiment in a sector plagued by intense competition and corruption allegations. Trading allows operators to sell airwaves that they aren’t utilising. This offers another exit route for a struggling operator apart from an M&A deal.
Sharing on the other hand allows operators to pool in their resources and use it but not sell to one another. Both though provide another avenue for stronger operators to beef up their bandwidth holdings, without having to take part in auctions, and could allow weaker players a way to monetise their bandwidth assets. For consumers, this could mean better quality of voice services and faster data speeds, and could translate into lower tariffs as operators’ capex could fall, analysts said.
The panel’s likely proposal on allowing sharing between more than two operators differs with the draft recommendations of the DoT reported late last year which limited that to just between two telcos in a service area. The committee though has agreed with the DoT proposals that spectrum can only be shared by operators holding airwaves in a circle, the person said. The DoT, which had suggested not allowing holders of 3G spectrum to share, has recently had a change of heart and now is of the view that since the 3G spectrum was bought by telecom operators in an auction (in 2010), it met with the basic criteria of being called ‘liberalised’ spectrum, and hence may be shared. However, this doesn’t mean that the DoT won’t appeal a telecom tribunal ruling that allowed 3G intra-circle roaming (3G ICR) agreements signed between operators in 2010, saying the telcos have been violating rules till now.
The panel’s proposals, if accepted by the DoT, will cheer telecom operators. They have been urging the government to allow sharing of 3G airwaves since they had paid a market price for the spectrum, more so as 3G networks were already congested, leaving the operators in desperate need for more airwaves.
Unlike the telecom department which feels the spectrum sharing agreements must have a fixed tenure of five years, the Trai committee is of the opinion that there should be no tenure, the person said. “Telecom permits are given for 20 years, it is pointless to fix a term for operators to share spectrum. It should be left to the market”. Speaking for the panel’s proposals, Rajan Mathews, director general of GSM industry body COAI said that operators should have the final say in how much of them and how much of spectrum they want to pool in since they have paid a market price and need to decided based on the needs of their subscribers.
(Source: The Economic Times, June 19, 2014)