Even as the fine print of the policy recommendations by TRAI on spectrum sharing and trading is sinking in, telecom players have expressed dismay and said that they do not see a clear roadmap over the pricing or the usage tariffs suggested in recommendations submitted to the DoT last week.
Indian telecom comapnies body - Cellular Operators Association of India (COAI), has said that there has to be clear framework in this area which shall enable the success of spectrum trading policy of the government. “A telco having 6.5 Mhz, can retain 5 Mhz but can offer 1.5 Mhz to a another operator for voice. But how this sharing of the bandwidth will be financially affected still has to be worked out…,” said Rajan Matthews, Director General, COAI told The Pioneer.
Industry observers say that this could either be between the two participating parties or it may be either in the form of barter arrangement with one operator using other operator’s network -- earlier done in the case of SMS sharing. “Or there could be a balancing of the total volumes between the two operators with the excess usage being charged at a particular rate,” said industry sources.
In order to harvest idle or unused bandwidth as well as bring about an optimum use by decongesting airwaves particularly in the metros circles, the TRAI has recommended that there should be a intra-band sharing and trading of bandwidth which has to be limited to two players. However, industry pundits hold that in the wake of 3G ICR (intracircle roaming) approved earlier by the DoT there is likely to be less use for the trading and sharing option as suggested by TRAI.
Moreover, with sharing and trading of the idle bandwidth, experts also see a lesser race for the spectrum auctions which could lead to loss to the government revenues in the long run. DoT earlier also announced a comprehensive M&A terms and conditions for consolidation of the sector which is expected to go for a major shakeout in the coming months particularly after the recent spectrum auction earlier in the year.
The TRAI has recommended levy of 0.5 per cent of Adjusted Gross Revenue (AGR) as excess SUC on both operators who share the spectrum. Even if one of the operators is sharing spectrum which it’s been allocated at administrative rate, the shared spectrum can be used only in the technology permitted by the original allotment, that is administratively allotted 1800 MHz spectrum cannot be combined with that acquired in the 2014-auction to provide 4G services.
However, the TRAI norms do not permit spectrum sharing across spectrum bands. Hence it would not permit a 800MHz spectrum player like RCOM with R-Jio without the later also participating in future auctions and winning 800MHz spectrum, say industry watchers.
Telecom experts, however, say that they believe that telcos incumbent’s spectrum holdings across various frequency bands are best positioned to take advantage of this regulation at a nominal cost which is suggested at 0.5 per cent of AGR as incremental SUC. Incumbents could collaborate and harmonise their existing less than 5MHz contiguous auctioned spectrum holdings and launch 4G services. Additionally, even in cases where there is sharing of administratively allocated spectrum, the experts say that incumbents can witness easing of network congestion.