Government amends telcos’ licences to include changes in spectrum cap

The Department of Telecommunications on Monday amended the unified access services licence and the cellular mobile telephony licence given to operators for providing telecom services for incorporating changes approved by the Cabinet on increasing the deferred payment for spectrum to 16 years and revising the spectrum cap norms.

The amendments come into force with immediate effect, meaning that from Monday itself, operators who want to opt for the 16-year payment option on spectrum installments can approach the DoT for the same. The revision in spectrum cap norms also comes into effect from Monday.

On March 7, the Cabinet approved the DoT’s proposal for allowing operators to opt for a one-time higher number of installments (maximum 16) for deferred payment liabilities on spectrum acquired in auctions conducted in 2012, 2013, 2014, 2015 and 2016.
It also approved removal of intra-band cap of 50% spectrum holding by an operator in a circle, and instead allowed an operator to have not more than 50% of all the sub-1GHz bands like 700, 800, and 900 Mhz put together.

DoT’s proposal to allow operators to hold 35% of the total spectrum assigned in a circle against the current cap of 25% was also cleared. Spectrum cap norms have been relaxed for airwaves acquired through auctions conducted in 2012, 2013, 2014, 2015 and 2016.

DoT’s proposals were part of the recommendations made by the regulator, Trai, in November last year. These recommendations were cleared by the Telecom Commission in January. This had come up after the DoT asked the regulator to examine the current caps following the government appointed inter-ministerial group’s suggestion that caps should be relaxed.

The IMG had recommend for increasing the deferred payment period to 16 years and had referred the issue of revision in spectrum cap norms to the regulator.

DoT’s view is that relaxation in spectrum cap norms provides optimum spectrum efficiency as well as encourages consolidation in the sector, while increasing the installment payment timeline will provide cash flow relief to the operators in the short term.

The sector is going through a rough phase on account of tough competition and is saddled with a debt of more than ` 4.60 lakh crore, a major part of which is related to spectrum.