India’s government this week approved spectrum trading, a decision that will enable some telcos to improve quality of service, and others to exit the market altogether.
The new rules apply to frequencies in all bands, the Business Standard reported on Wednesday. Operators are not required to seek government permission before agreeing a deal, but they are required to inform the government 45 days in advance of a trade.
"We have approved the spectrum trading norms today (Wednesday). Now the telecom companies can trade spectrum among themselves. For this, they need not take any government permission," said Ravi Shankar Prasad, minister of communications and IT, in the report.
The buyer of the spectrum will have to pay a 1%, non-refundable trading fee, which is calculated based on the market price of the airwaves or the price paid for them when they were originally allocated, whichever is higher, the paper said.
Furthermore, India’s existing spectrum caps still apply to traded spectrum, so operators that acquire more bandwidth must ensure they do not break these rules, said the government.
The aim is to enable capacity-constrained mobile operators to ease the strain on their networks and to help struggling telcos sell their spectrum and exit the market.
Wednesday’s decision is the second significant move by the Indian government to address the shortage of spectrum available to mobile operators.
In August, the government gave the go-ahead to spectrum-sharing between mobile operators in the same telecoms circle.
