Mobile operators unhappy over caps on spectrum sharing may have reason to rejoice. The guidelines approved by the Union Cabinet earlier this week were viewed as being too restrictive as they barred sharing between two big operators having large spectrum holdings. However, telecom minister Ravi Shankar Prasad has said that he will be reconsidering the caps that prohibit such a sharing arrangement.
Speaking at the Express Group’s Idea Exchange programme on Friday, Prasad said, “We will look at the cap part separately. I have asked my officers to re-look at the caps. However, I cannot give a definite time frame by when this exercise would be complete. But the matter would certainly be re-looked at.”
Another statement by the minister may offer operators still more relief. Prasad said he is looking at their concerns on the rules of spectrum trading which leads to double taxation.
“As far as the trading part is concerned, the telcos had raised certain issues of taxation. I have asked the department to consider it in detail and then we will decide,” Ravi Shankar Prasad said.
Though spectrum sharing and trading were approved by the Telecom Commission as one proposal, the Cabinet earlier this week did not take up the matter of trading. This was because the operators had raised the issue of double taxation as the rules state that both the seller and buyer of spectrum through trading would have to pay licence fee on the revenue earned.
The reason why the cap needs to be looked at afresh in the case of sharing and even trading is because the two lead to more spectral efficiency as well as optimal utilisation of this scarce resource, which can lead to reining in the malaise of call drops. However, the prescribed cap — 25% of the total assigned in a circle and 50% in a band — restricts any possibility of sharing between two big operators with large spectrum holding, like between Bharti and Vodafone, for instance. Though for purposes of calculating the cap only 50% of the spectrum held by the other operator in the band being shared would be counted as additional spectrum, the problem still does not get resolved.
Unless the caps are not liberalised further or done away with, sharing and trading would not yield any result.
However, the minister defended the norm stipulating that administratively allocated spectrum cannot be shared with the one acquired through auctions unless the operators pay the price differential between the two. “Earlier, the spectrum was granted administratively, which came embedded with the licence. Post the Supreme Court 2012 judgment, all spectrum is being allocated through auction, where high stakes are involved. How can we compare the auction delivered spectrum with the administrative one? It is neither proper, nor moral, nor even good in terms of propriety. So what we have said is that administrative can do with administrative, auction can do with auction. And if administrative want to do with auction, they must get liberalised by paying the market price,” Prasad said.