MUMBAI, INDIA: Call drops may soon become a thing of the past. Even the much required consolidation among telecom companies will get a fillip as the telecom department has given its final clearance to long-awaited rules on sharing and trading of airwaves or spectrum sharing.
“We will send the norms to the Cabinet by the end of this month," Rakesh Garg, Telecom Secretary, said after a meeting of the Telecom Commission.
Trading allows operators to sell airwaves that they aren't using, offering an exit route for struggling operators. Through sharing, operators can pool in their spectrum resources to create a bank where each partner can use the airwaves.
While the move provides another avenue for operators such as Bharti Airtel, Vodafone India and Idea Cellular to beef up their bandwidth holdings, others like Reliance Communications, Tata Teleservices and Aircel will be able to trade or share their underutilized bandwidth.
For consumers, the result will be better quality of voice services and faster data speeds, as sharing could reduce traffic congestion on the network. Telcos have cited lack of airwaves and increasing voice traffic as the main reason for rising call drops. Spectrum sharing will allow operators to reduce capital expenditure which will let them pass on the benefit to subscribers through lower tariffs.
"This is clearly in the right direction,” remarked Rajan Mathews, Director General, Cellular Operators Association of India. “The rules provide an exit option for some companies who want to monetize their spectrum assets.”
In case where the spectrum is allotted at administrative or government-decided prices, sharing will be permitted only for those services which can be provided through the administratively allocated spectrum. This anomaly will fade away with continuing auctions, Mathews said.
The regulator had also suggested that operators be allowed to sell the spectrum through trading only after two years from the date of its acquisition. Administratively assigned spectrum can be converted to tradable spectrum after paying a prescribed market value.
According to analysts, spectrum sharing would allow telcos to aggregate spectrum which was split up between many operators at present and also allow them to gather contiguous spectrum, which is essential for offering 3G and 4G services. Fourth-generation services can't be offered without at least 5 Mhz of continuous airwaves.