Spectrum sharing between mobile operators is set to become a reality. Minister of state for communications and IT Jyotiraditya Scindia has convened a crucial meeting of the officials of department of telecommunications (DoT) on Monday to consider a proposal to this effect.
FE had first reported in its June 20 edition that the government was looking at allowing spectrum sharing among mobile operators to tide over the spectrum crunch.
In all probability, the DoT would refer the matter to the Telecom Regulatory Authority of India (Trai) for an expert view. Trai may also be asked to frame guidelines to govern spectrum sharing, while simultaneously ensuring that such sharing does not lead to trading or hoarding.
Spectrum sharing basically allows a licensed operator with spectrum but not enough subscribers to lease out excess capacity to another operator within its circle. The government also stands to gain a slice of the fee paid for the shared spectrum.
The DoT?s proposal comes at a time when several pan-India players are facing an acute shortage of spectrum, particularly in metro and A circles, while regional players migrating to an all-India footprint and new licencees have excess spectrum capacity in their initial phase of operations.
However, analysts point out that such sharing is at best a short-term measure, as all operators must meet rollout obligations, which mandate 50% circle coverage within three years of operation.
Spectrum trading is prevalent in the US, Australia, New Zealand, Guatemala and Spain. However, the US model has not proved very successful because spectrum is auctioned off to operators, after which they are free to resell it. However, high bid prices render reselling unfeasible.
Unlike in the US, however, in India, 2G spectrum is not auctioned. Operators pay a licence fee of Rs 1,650 crore for a pan-India licence and are given a start-up spectrum of 4.4 mhz bundled with the licence. Thereafter, they are allocated additional spectrum after achieving a prescribed subscriber base. Operators pay a revenue share to the government for use of spectrum.
Spectrum sharing is different from a mobile virtual network operation. MVNOs buy airtime in bulk from licensed operators and resell it directly to consumers, but do not own the spectrum. Spectrum sharing, on the other hand, takes place only between licensed operators.