Telecom Commission relaxes intra-band spectrum cap to 35%; big relief to these companies

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Updated: Jan 09, 2018 7:09 PM

The Telecom Commission on Tuesday approved TRAI's recommendation on relaxing spectrum-holding caps to 35%, which is critical for key mergers to go through and is likely to benefit operators such as Vodafone and Idea Cellular to retain their airwaves.

new spectrum cap norms, telecom commission on spectrum cap norms, spectrum capitalisation new rulesThe Telecom Commission on Tuesday approved  TRAI’s recommendation on relaxing spectrum-holding caps to 35%.

The Telecom Commission on Tuesday approved  TRAI’s recommendation on relaxing spectrum-holding caps to 35% from 25%, which is critical for key mergers to go through. The decision will provide a major relief for the soon-to-be-merged Idea Cellular and Vodafone, as they would have breached the spectrum cap in certain locations under the existing rules. The decision would also enable aggressive newcomer Reliance Jio to pick up additional spectrum, if needed, in bands like 800 MHz.

In its September meeting, the Telecom Commission had in- principle approved the extension of time period for the payment of spectrum bought in auctions by telcos to 16 years from the current 10 years, as recommended by the IMG. It had also approved the IMG recommendation to lower the interest rate charged over penalties imposed on service providers with slight modifications.

The commission had sought a legal opinion on some of the points it approved at its previous meeting in September-end before firming up its view. Trai last month recommended that the ceiling on spectrum held by mobile operators within a particular band should be removed, while suggesting a 50 per cent cap on combined radiowave holding in efficient bands like 700 MHz, 800 MHz and 900 MHz.

Trai has also suggested that the overall cap on holding spectrum should be raised from the current 25 per cent to 35 per cent. Besides this, TC is likely to consider raising of FDI limit up to 100 per cent for all telecom services including infrastructure through automatic route.

At present 100 per cent FDI is allowed, of which up to 49 per cent investment in a company can be done through the automatic route. The inflow of overseas investment beyond that requires government approval because of security reasons.

According to the source, the panel may also consider approving of grants for IITs to set up lab for indigenous development and testing of 5G technologies.

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