The Indian government has given the go-ahead to spectrum-sharing between mobile operators in the same telecoms circle.
Deals will be restricted to companies that both have the same type of spectrum, the Economic Times explained. So two telcos with 4G spectrum in the same circle would be permitted to share, for example.
However, operators will not be allowed to lease spectrum to one another.
In addition, the government did not address the issue of spectrum trading. Citing an unnamed source, the paper said operators had expressed concerns that the state’s proposed trading rules would see them taxed twice on spectrum.
The lack of clarity on spectrum trading is standing in the way of any serious consolidation in the mobile market. Until the government has made a final decision on the rules, telcos are unlikely to make any M&A moves.
Regarding sharing, the government has provided highly-structured rules based on the price paid for airwaves; if one operator paid more for spectrum than the operator it aims to partner with, they will be required to equalise the value of the frequencies through the sharing agreement. The government will also l evy an additional fee on shared spectrum, increasing operators’ spectrum usage charge by 0.5% on shared airwaves.
Operators are allowed to share spectrum for a period of five years with the possibility to extend for another five. No operator is permitted to hold more than 25% of the airwaves in a single circle or more than 50% of a single band.
"Sharing will allow efficient utilisation of bandwidth and help address issues of call drop and call congestion," India’s telecoms minister Ravi Shankar Prasad told the Economic Times.
