Union Cabinet approves spectrum sharing by telcos

New Delhi :In a bid to ease congestion in telecom, the Cabinet has cleared a proposal on that had suggested allowing telcos to share spectrum in the same band. Telcos will now be able to share their unused spectrum thereby enhancing network quality and reducing operational costs. There was no decision on spectrum trading norms, which is expected to lead to greater consolidation in the sector.

“Fulfilling the government’s commitment to improve spectral efficiency and quality of service, which is very essential to fulfil the dream of Digital India, the Union Cabinet chaired by the Prime Minister, Narendra Modi, today gave its approval to the guidelines on spectrum sharing, arising from the recommendations of the Telecom Regulatory Authority of India (TRAI),” an official release said.

Spectrum sharing would be allowed only where both the licensees are having spectrum in the same band and leasing of spectrum will not be permitted, it said.

Also, sharing may be permitted where both entities possess spectrum for which market price has been paid.

Spectrum usage charge (SUC) will be levied on the entire spectrum holding in the particular band and all access spectrum including traded spectrum will be sharable.

At present, telecom operators are allowed to share passive infrastructure like mobile towers only.

With the Cabinet’s approval, telcos will be able to share their unused spectrum thereby enhancing network quality and reducing operational costs.

The official release said that SUC rate of each of the licensees post-sharing shall increase by 0.5 per cent of Aggregate Gross Revenue (AGR).

However, in respect of spectrum in 800 MHz (CDMA) acquired in the auction held in March 2013, sharing of spectrum shall be permitted only if differential of latest auction price and March 2013 auction price on pro-rata basis on the balance period of right to use the spectrum is paid.

Sharing may be permitted where both sharing entities are having administratively allotted spectrum and where one entity has spectrum acquired through auction or liberalised spectrum and the other has spectrum allotted administratively, sharing shall be permitted only after spectrum charges are paid for liberalising the administratively allocated spectrum.

“Spectrum sharing will be restricted to sharing by only two licensees subject to the condition that there will be at least two independent networks provided in the same band,” the statement said.

The prescribed limits for spectrum cap shall be applicable for both licensees individually.

Guided by the principle of ‘ease of doing business’, the Cabinet also decided that both licensees sharing the spectrum shall jointly give a prior intimation for sharing the right to use the spectrum at least 45 days before the proposed effective date of the sharing.

“Over all it is positive move. We will have to see how Department of Telecom implements it in licence condition. If it is as recommended by TRAI then it will help industry. Sharing will help industry in building capacity and address issues like call drops,” Industry body COAI Director General Rajan S Mathews said.

In November, 2012, the then Government approved the principle of sharing the spectrum, but detailed guidelines were not issued, and the policy could not be implemented.

TRAI last year recommended sharing of all categories of telecom airwaves held by operators including spectrum allocated at old price of Rs 1,658 crore or assigned without auction.