The Telecom Regulatory Authority of India is planning to remove 50% limit on spectrum holdings within a particular band. As far as the Idea-Vodafone synergy is concerned, the step will help them retain all their airwaves. It will also allow Reliance Jio to acquire more airwaves in 850 MHz band of Reliance communications.
The government would also be able to boost its revenue as the number of bidders would increase at the next auction.
A Trai member said, “Spectrum is now liberalized and any band can be used for offering any service, so removing the 50% cap will give a lot more flexibility and thus, better utilization of spectrum.” Still, the company is well aware of the fact that the relaxation would hurt the smaller companies.
It is still under discussion whether the 25% cap should be raised. If not, then the consequence would be that one large firm would dominate the market.
Currently, the govt. allows a company to hold less than 25% spectrum allocated in a service area, and below 50% in a spectrum band. Carriers in India use airwaves in the 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands.
Recommendations by Month End
The official said that its recommendation would soon reach Department of Telecommunication (DoT). Eftsoon DoT’s decision would reach the cabinet for final approval.
It is believed that the Vodafone-Idea merged entity would breach the 900 MHz band in UP West, and in Maharashtra and Gujarat in 2500 MHz band. The Swiss brokerage reported that the merged entity would be able to sell excess spectrum worth Rs. 7600 crores.
Analysts couldn’t yet estimate whether there would be breach based on spectrum limits of 50% or not. Some still believe that scrapping limits on inter-band spectrum would remove such ambiguity.
RCom said that Jio digital is interested in its assets and thus it has asked Trai to abolish cap on spectrum holdings. RCom has got a 30 MHz of 4G airwaves in the highly sought 850 MHz band, though Jio hasn’t approved its interest in buying additional airwaves from RCom.
Airtel has suggested to lease the upper limit from 25% to 33% of the total spectrum. RCom has asked for removal while Vodafone has asked for relaxation in the spectrum shares. If 25% limit isn’t disturbed, then it is bound to breach the cap in four circles-Gujarat, Maharashtra, Haryana and Kerala.