After issuing guidelines for trading, the Telecom Regulatory Authority of India is now set to unveil the rules by which operators can share spectrum with one another.
According to sources, Trai would be putting in place guidelines for spectrum sharing, which is distinct from trading, within the next six weeks.
The guidelines though would need to be approved by the department of telecommunications. Even the spectrum trading guidelines are currently awaiting approval of the DoT.
Sources said the spectrum sharing guidelines of Trai would be market-friendly than what has been drafted so far by the DoT, in the sense that it would allow the entry of mobile virtual network operators. A draft of spectrum sharing guidelines formulated by DoT in december 2013 did not favour MVNOs as it said that spectrum could be shared only between operators who own spectrum. This was seen as a dampener by the operators.
The Trai’s approach on sharing is likely to be aimed increasing spectral usage efficiency and enable companies to sell minutes of spectrum usage, thereby monetising an idle resource.
?BSNL, which has not been able to ‘utilise’ its entire quantum of spectrum, may want to ‘share’ minutes of usage with another mobile operator or a mobile virtual network operator for a fee. This not only allows BSNL to monetise its asset (spectrum), which would otherwise remain idle, it would also enable the MVNO to operate a low-cost service model,? said a source.
Analysts said it is also expected to boost competition and provide incentives for innovation to mobile operators.
An MVNO offers voice and data services without actually owning any spectrum or infrastructure such as towers or transmission equipment.
Sources said Trai’s spectrum sharing proposals may also include rules on bulk airtime purchase by MVNOs. Earlier, Trai has proposed to introduce MVNOs as distinct service providers with their own licensing and regulatory framework. ?An MVNO could be a licensee in any service area. It can provide mobile services to its own customers through an agreement with the licensed mobile service provider,? Trai said in a proposal note on spectral management.
The new proposals may also permit spectrum sharing in all bands, including high speed 3G radiowaves. Earlier, Trai has not permitted spectrum sharing between operators holding 3G radiowaves. Since no telecom player has pan-India 3G spectrum, the top three operators had signed intra circle agreements under which they were using each other?s network in areas where they did not have 3G spectrum. The government has deemed this illegal and the matter is now in the courts.
Spectrum sharing is different from trading. While the latter encourages consolidation, the former supports competition and spectrum efficiency.
Trading is expected to boost mergers and acquisitions in the sector. Once trading is allowed, a company like Vodafone for instance can look at acquiring 3G spectrum of another firm in the circles in which it does not have the radiowaves. This would be different from buying out the entire company and merging it with itself where lot of assets would get duplicated, said analysts.
