India’s crowded mobile market is unlikely to consolidate any time soon, the Telecoms Regulatory Authority of India (TRAI) said this week, due to restrictions governing spectrum.
Indian mobile operators are currently limited to accumulating no more than 25% of available spectrum nationwide, and 50% in any one telecom circle, explained Arvind Kumar, an advisor at the TRAI, at CommunicAsia on Tuesday.
India is home to no fewer than 12 mobile operators and with fierce competition putting the squeeze on margins, there is pressure to consolidate.
In May, a Bloomberg report claimed Reliance Communications, India’s fourth-largest mobile operator, has held merger talks with smaller rival Sistema.
Earlier that same month, local news outlets claimed that Telenor’s Indian unit, Uninor, is in talks to acquire smaller rival Videocon Telecom, a move that would push the former’s market share above 5% from 4.7% at the end of March.
"It is quite possible that consolidation in the traditional sense cannot happen in [India’s] telecom sector," Kumar said.
India has allocated only 40% of available spectrum for mobile use, Kumar said, "which is the primary reason why [operators] can’t provide a decent mobile broadband experience.
"We want more spectrum to be allocated" to mobile.
In the meanti me, India is on the verge of coming to a decision on whether to allow operators to share and trade spectrum.
According to local media, the Department of Telecommunications is expected to finalise its spectrum trading and sharing policy by the end of June. Operators, as well as the TRAI, are firmly in favour of allowing operators to share and trade spectrum because it will enable service providers to make better use of this scarce resource.
