The Telegraph
Tuesday , July 22 , 2014
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Trai allows spectrum sharing

New Delhi, July 21: The telecom regulator today permitted spectrum sharing among telecom service providers across all six frequency bands — 800, 900, 1800, 2100, 2300 and 2500MHz — that have been identified for farm-out among telecom service providers.

But it melded the largesse with certain restrictions that telephony companies are certain to bicker over.

Releasing its latest guidelines on spectrum sharing, the Telecom Regulatory Authority of India (Trai) said spectrum sharing would be limited to two licensees within the same circle. No permission will be required from the government for the sharing arrangement that will allow two telecom providers to pool their respective spectrum for simultaneous use in order to boost spectral efficiency.

Leasing of spectrum will not be allowed.

The telecom companies have been clamouring for new guidelines that will formalise their right to share spectrum but the Trai’s latest norms fall short of expectations.

The guidelines say spectrum sharing will be restricted to two licensees subjectto the condition that therewill be at least two independent networks in the same band.

DoT hasn’t yet farmed out spectrum in the 2,500 MHz band. It is planning to come out with a fresh auction of 3G radio waves in the 2,100 MHz band later this year.

The new guidelines, which have to be ratified by the government, allow service providers to limit the spectrum sharing arrangement to a small area within a circle that has high-density traffic — like Connaught Place in Delhi or Dalhousie Square in Calcutta.

But it does not allow sharing between telecom players who do not have spectrum in the same band. Thus, for instance, it will not allow a sharing arrangement if one player holds spectrum only in the 900 MHz band and the other has it in the 2,300 MHz band.

Spectrum holding in India is badly fragmented because there are as many as seven to 13 licensees of 2G, 3G and broadband wireless access spectrum in the 23 circles.

In February 2012, the telecom regulator had come out with its first set of guidelines on spectrum sharing that did not allow such arrangements among licensees holding 3G spectrum.

While Trai has now relaxed that condition, it is still sticking to its guns and will not allow telecom players to ride piggyback by offering services on a competitor’s spectrum if it does not hold spectrum in that circle.

In 2010, telecom players had limited their spectrum bids to certain circles and then joined hands to share their spectrum so that their customers enjoyed a seamless service when they travelled outside their home circles.

Trai frowned on such arrangements and tried to block spectrum use collaborations. Telephony services were able to continue that arrangement after the appellate tribunal ruled in April this year that they could continue with these pacts.

If the telecom service providers were looking for some relief on that score, it wasn’t forthcoming with Trai refusing to recognise inter-circle spectrum sharing arrangements. The guidelines are also loaded against the older telecom players who acquired their licences in the mid-nineties which came bundled with spectrum.

Trai has said that when a player holding liberalised spectrum — that is radio waves acquired through an auction process — enters into a spectrum sharing arrangement with another player holding “administratively assigned” spectrum, then they will be able to share the spectrum to provide only GSM-based mobile services.

Many of the older players will have to give up the spectrum they received back then and join an auction process if they wish to win it back. The older telecom players are resisting such a move, insisting that as they assumed big risks when they came to India as pioneers and they ought to enjoy special treatment.

The severe restriction on spectrum sharing arrangements in their case appears to be designed to nudge them towards an auction process when the 20-year tenure on their spectrum expires.

However, telecom players who acquired spectrum through an auction process in 2010 and afterwards will be allowed to share the radio waves and offer services using all technologies — GSM, CDMA, WCDMA and LTE.

Trai said spectrum sharing would result in higher revenues for both the telecom licensees. Therefore, both licensees would also have to pay a higher spectrum usage charge to the government.

It said that it was simply not possible to monitor the quantum of spectrum being shared at each site and to segregate the adjusted gross revenues (AGR) site-wise or area-wise. Therefore, for the purpose of charging the SUC, the government would consider that the licensees were sharing the entire spectrum they held in a particular band within the circle.

This means that if one telecom player holds 8MHz of spectrum and the other has 5MHz and the two agree to pool in 4MHz each, the SUC will be calculated on the entire holding — that is 8MHz in the case of licensee A and 5MHz in the case of Licensee B.