Telcos see a new ray of hope with new spectrum trading guidelines

NEW DELHI, INDIA: The Union Cabinet cleared approved the spectrum-trading guidelines today for efficient spectrum usage in the telecom sector.

The telecom sector was a highly regulated sector earlier. But the prevalent regulatory paradigm is inadequate to deal with the current situation. A market oriented approach is needed to increase opportunities for efficient spectrum usage and for better services to consumers.

In India the spectrum assignment is made for a period of 20 years. During this period, some operators are able to acquire subscribers and grow at a faster rate as compared to other operators. This results in the spectrum lying un-utilized with some of the players while other operators face spectrum crunch as spectrum is a scare resource.

Therefore, Spectrum Sharing and Spectrum Trading are necessary to improve the quality of service. Spectrum trading allows parties to transfer their spectrum rights and obligations to another party. This allows better spectrum usages as the idle spectrum from the hands of one service provider gets transferred to the other service provider who is facing spectrum crunch.

This will fulfill the present government’s commitment of ease of doing business apart from improving the spectral efficiency and quality of service which is very essential to fulfill the dream of digital India.

Both the licensees trading the spectrum shall jointly give a prior intimation for trading the right to use the spectrum at least 45 days before the proposed effective date of the trading.

A telecom service provider will be allowed to sell the spectrum through trading only after two years from the date of its acquisition through auction or spectrum trading or administratively assigned spectrum converted to trade-able spectrum.

Spectrum Trading shall be permitted only on a pan Licensed Service Area basis.

Buyers need to pay a non-refundable transfer fee of one percent of the transaction amount or one percent of the prescribed market price, whichever is higher- for all spectrum trade transactions.

Spectrum trading will not change the original validity period of spectrum allocation.