To promote ease of doing business, the Telecom Regulatory Authority of India (Trai) has recommended easy and transparent spectrum surrender guidelines, allowing mobile operators to shed excess airwaves in a frequency band by paying Rs 1 lakh.
If accepted by the Department of Telecommunications, the move will benefit all the operators, but Vodafone Idea could be the biggest benefactor as it will allow it to surrender excess spectrum in many circles, allowing the telco to cut costs.
Currently, to shed the excess spectrum, the only option available to telcos is to sell out the spectrum through the prescribed spectrum trading process. As per the spectrum trading guidelines, the telecom service providers (TSPs) are permitted to trade their partial/entire spectrum holding to another TSP after a lock-in period of two years, post assignment of such spectrum.
As part of the telecom reforms package announced in September 2021, the government had already created a provision for surrender of spectrum. As per the provision, telecom service providers may be permitted to surrender spectrum after a minimum period of 10 years and the firms are required to inform the government one year prior to surrendering their spectrum. But since the decision will be applicable for the auctions conducted henceforth, Trai has recommended that DoT may examine the possibility for creation of provision for surrender of spectrum for the existing spectrum holding of the TSPs acquired through past auctions.
Regarding the surrender fee, Trai has said the fee should not be kept high to make the provision ineffective. “It should be a kind of administrative fee for the purpose of processing of surrender application. Surrender fee may be kept as Rs 1,00,000 per spectrum band per LSA,” Trai said.
Trai has said that DoT should come out with guidelines for surrender of spectrum with clearly defined timelines and the process should be implemented through an online portal. Trai said once a telco makes a request for surrendering spectrum, DoT should convey in-principle approval or otherwise within 60 days. “Outstanding spectrum payment till the proposed date of surrender, if any, in respect of proposed quantity of spectrum being surrendered, should be communicated to the TSP along with the in-principle approval,” Trai said.
The telco has to clear the dues as communicated by DoT within three months and upon clearance, the final approval to the surrender of spectrum, effective from proposed date of surrender, should be communicated by DoT to the TSP within 15 days. It further added that other payment/dues should not be linked to surrender of spectrum under consideration.
DoT should put to auction the surrendered spectrum immediately, once the final approval to surrender of spectrum (upon clearance of dues up to the proposed date of surrender) is issued.
To avoid any possible misuse, Trai has recommended that in case, a TSP surrenders partial or complete spectrum in a band, it will be barred to take part in the auction of spectrum in that band for a period of two years from date of surrender of spectrum. Secondly, in case, a TSP has acquired some spectrum in a band, a lock-in period of two years will be applicable, before surrendering the qualifying spectrum in that band acquired earlier.
The Authority has recommended that a TSP should be permitted to surrender the spectrum after a minimum period of 10 years from the date of acquisition of spectrum, whether acquired through auction, trading or any other permitted means of acquisition.