New Delhi, Feb. 15: Telecom minister Kapil Sibal today said that operators holding third generation (3G) spectrum would not be allowed to share those radiowaves under the new telecom policy.

The move is likely to have a bearing on the legal battle being fought by Bharti Airtel, Vodafone and Idea against the government on this issue, said industry experts.

The new ruling has also dampened the spirits of other 2G players who wanted to enter the 3G segment through similar agreements.

Telecom tribunal TDSAT is set to hear the case on 3G inter-circle arrangements tomorrow.

The TDSAT had directed the operators to continue providing these high-speed services till a judgment was pronounced.

“Operators had pinned their hopes on the new telecom policy allowing spectrum sharing, which in turn would have let them provide high revenue earning 3G data services on a pan-India basis even if they do not have radiowaves for all circles,” said an executive from a top telecom firm.

If the government has put a dampener on one route for revenue generation, it has opened another window of opportunity.

Sibal said spectrum sharing between 2G operators would be permitted if both the players held the same amount of radiowaves. The sharing is, however, limited in the same service area or mobile circle.

This will open up new revenue streams for old operators such as Airtel and Vodafone to lease out radiowaves.

The minister was announcing part of the rules that will form the new telecom policy. While these rules come into play from today, the complete policy will get implemented by mid-2012.

Sibal said all GSM service providers would be allowed to hold spectrum of up to 8 MHz in most of the circles, which would go up to 10MHz in Delhi and Mumbai.

Earlier, the DoT had planned to cap the spectrum limit at 6.2MHz in each circle and charge a hefty one-time fee for holding extra radiowaves.

“Decisions on all matters relating to one time spectrum charge will be taken separately,” said Sibal.

Operators can also acquire additional spectrum beyond prescribed limits through the auction route.

Merger norms

On mergers and acquisitions, Sibal has agreed with the Trai’s liberal proposals that are likely to allow consolidation.

Sibal said if a resultant entity after merger commanded up to 35 per cent market share, it would be allowed under a quick and simple process.

The limit for spectrum holding by the resultant entity would be 25 per cent of the spectrum assigned in a service area.

On mergers above 35 per cent and up to 60 per cent of market share, Sibal said “it is under consideration”.

Sibal said all future licences will be unified licences and allocation of spectrum will be delinked from the licence. Spectrum, if required, will have to be obtained separately.

On renewal of licences, Sibal said it would be done for 10 years.

Sibal also announced a uniform licence fee of 8 per cent of adjusted gross revenue across services and circles.