A good step but hardly a leap

Aug 07 2014, 02:08 IST
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SummaryA method of determining levies that is simpler to operate and protects the govt’s targeted revenues is needed.

Last month, the Telecom Regulatory Authority of India (Trai) recommended to the government that telecom operators be allowed to share unused spectrum. This is a logical and a necessary first step, but hardly a leap. The government will have to take more substantive measures than spectrum sharing to deliver the amount or type of spectrum that companies need urgently.

India has a bigger stake in spectrum than any other developing country including China. Wireless devices like mobile phones need spectrum to work and over 95% of Indians have no other means to make telephone calls or access the internet.

Spectrum sharing makes sense for consumers as well as government. Trai points out that the nature of spectrum sharing is such that the resulting capacity to carry wireless traffic exceeds what players had prior to sharing it. So, a company with a large subscriber base can reduce call drops in busy commercial areas if it shares spectrum with a later entrant who needs less spectrum to support its new services. Additional traffic means more revenues for operators and more for government, since it gets a significant share as licence fees and spectrum usage charges (SUC).

Trai’s current recommendations on spectrum sharing are less restrictive than those it made two years ago. If the government accepts the new proposals, any operator can share any spectrum allocated to it and not just the part it acquired in auctions, as Trai had recommended earlier. It will need no permission from the government to share spectrum. They need to only inform the WPC (Wireless Planning and Coordination Wing) and pay a fee of R50,000.

Trai was right to set up a committee of operators’ representatives to advice on spectrum sharing. This would have helped produce a framework that meets most industry concerns and anticipates several, if not all, of the reservations that have caused the government to delay a decision on spectrum sharing. These recommendations will assuage some, if not all, of those fears.

The proposals for sharing will not allow companies to escape future auctions. The framework allows a company to only augment the spectrum it holds, but not to acquire spectrum in a different band. For instance, it cannot share, say, 900 MHz spectrum belonging to another player if it never obtained any spectrum of its own, either administratively or through bidding in an earlier auction.

The proposals create no new rights. A player will not be able to

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