The Cabinet may clear the path for one of the most awaited policies for the telecom industry on Wednesday – spectrum trading.
The policy is expected to be in line with recommendations made by the Telecom Commission, which had approved the spectrum trading and sharing guidelines suggested by the Telecom Regulatory Authority of India (TRAI) on June 12. While the spectrum sharing guidelines were approved by the Cabinet on August 12, the guidelines on trading were kept on hold.
“It is there in the agenda and the Cabinet is likely to clear the guidelines on spectrum trading in tomorrow’s (Wednesday) meeting without any changes to what the Telecom Commission had decided,” a senior official told
The move will not only help telecom companies trade their excess airwaves with each other, but also benefit the end-consumers and address issues such as call drops, the official added.
For example, Bharti Airtel will be able to take the unused 4G spectrum from Aircel and expand its presence in more cities.
Aircel had won 4G spectrum in the 2010 auction but has not been able to fully launch services due to funding issues.
Similarly, MTS or Reliance will be able to buy CDMA airwaves from Tata Teleservices. Trading provides an alternative route for operators to consolidate spectrum without getting into expensive merger and acquisition deals. Smaller players benefit because it provides them an exit route.
As smartphone and tablet users gobble up more and more gigabytes, telecom companies will need more spectrum.
As of now, Indian telecom companies have much smaller quantum of spectrum compared with their global counterparts. If spectrum trading is allowed then there will be greater opportunity for each operator to get access to a larger pool of air waves.
However, the Cabinet is likely to propose a trading fee, an irritant which the industry will oppose.