11:07 am - Saturday 29 April 2017

Telecom Department mulls not to allow spectrum sharing for telecom operators

By insightVAS - Mon Jul 15, 12:17 pm

The Department of Telecommunications (DoT) has decided that it would not allow any spectrum sharing and trading among operators for sometime as it may hamper the proposed airwaves sale, delaying the implementation of a key provision of the National Telecom Policy announced last year.

According to a senior DoT official, there were fears that spectrum sharing at this stage could encourage cartelisation among operators during the upcoming auctions and prevent the government from realising the true value of this resource.

“We have decided to assess whether we need to allow sharing of spectrum at this juncture. We are trying to understand the practices in other countries and see whether we need to allow sharing of spectrum at all,” another senior DoT official told news source on condition of anonymity. DoT has set up an internal committee under the wireless advisor to study the issue.

It may disappoint the mobile operators that were looking forward to sharing airwaves as a cost-efficient way of managing the shortage of spectrum.

Prashant Singhal of E&Y said if the government did not allow operators to share spectrum among themselves, it would result in an artificial increase in the price of airwaves as operators in need of more spectrum would now be compelled to buy it from the government only. “Increasingly, operators are focusing their energies on certain target circles and in the remaining circles they can easily offer excess spectrum to another operator if sharing is permitted,” he said. Telecom regulator TRAI had recommended that the government should allow operators to pool their spectrum holdings in order to achieve spectral efficiency.

Planning Copmmission Deputy Chairman Montek Singh Ahluwalia, too, wrote to the department saying it was time operators were allowed to trade the resource between themselves.

According to a proposal earlier being considered by DoT, operators were to be allowed to pool their spectrum holding with a certain cap. They were to pay a spectrum-sharing charge to the government in return for the cost efficiencies they would have achieved.

But for now, the telecom department appears to have developed cold feet on the issue. “Only a handful of players own spectrum in the first place; we aren’t yet very confident of how the market dynamics will work when operators begin trading spectrum,” said one of the two officials quoted earlier.

The Comptroller and Auditor General (CAG) had in April alleged that telcos acted as a cartel in the last two spectrum auctions and accused the government of wittingly or unwittingly aiding and abetting mobile phone companies by not acting against them. Even though operators might not be able to share spectrum in the near future, the government plans to allow mobile virtual network operators, or MVNOs, to buy talk-time from the operators and sell it.

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