Telecom Commission agrees to TRAI views on spectrum cap

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Telecom Commission has in-principle agreed to the views of the Telecom Regulator Authority of India (TRAI) on determining spectrum holding limits, PTI reported.

TRAI submitted its views as DoT sought its response on an order dated 14 May 2015 from the Supreme Court in a case relating to Reliance Communications.

What are TRAI’s views on spectrum cap

TRAI had said the provision of spectrum cap should continue on the holding that a telecom network operator may acquire through auction or otherwise.

As per the existing provisions, a cap of 25 percent of the total spectrum assigned in all bands – 800, 900, 1800, 2100, 2300, 2500 MHz band and 50 percent within a given spectrum band in each circle is applied for total spectrum holding by each operator. For the purpose of calculation of cap in the auction as per NIA, spectrum put to auction is included in the total spectrum assigned.

TRAI in July 2015 said that there was no need to modify the existing spectrum cap of 50 percent of the spectrum assigned in each of the 800, 900, 1800, 2100, 2300, 2500 MHz band and 25 percent of the spectrum assigned in all these bands put together in each service area.

On the methodology of calculating spectrum cap, TRAI said all spectrum assigned to telecom operators including spectrum which was put to auction but remains unsold, spectrum which was assigned but subsequently surrendered or taken back by the licensor and spectrum put to auction should be counted. However, spectrum out of the above will not be take into calculation, if the Government assigns if for non-commercial purpose like Defense.

TRAI also said the spectrum which may become available to the WPC / DoT for commercial use after its refarming from other users such as defense at different point of time should not be counted for determining the spectrum caps until it is put to auction by DoT.

TRAI has also said the Government should not take back spectrum assigned to telecom network operators even if it is less than 5 MHz in any band.

How spectrum cap norms will assist telecoms

PTI report said the implementation of TRAI views will enable Bharti Airtel to acquire an additional 5 MHz spectrum in Delhi in either 1800 or 2100 MHz band — both these can be used for 4G services.

The regulator definition will also help Bharti Airtel’s ability to buy additional spectrum for mobile internet services in nine more telecom circles including Andhra Pradesh, Bihar, Karnataka, Kolkata and Tamil Nadu.

Vodafone will be able to acquire more blocks of spectrum through trading in Delhi, Gujarat, Karnataka and Mumbai. It will help Idea Cellular acquire more blocks spectrum through trading in 7 of the 22 circles which include Delhi, Gujarat, Mumbai and Maharashtra.

Earlier, Bharti Airtel has suggested that the cap for spectrum holdings should be increased from 25% to at least 40% of the total holdings in all bands together and from 50% to 60% for spectrum in a particular spectrum band.

Lower spectrum cap impacted Airtel

The reduction in spectrum caps has impacted Bharti Airtel in three service areas — Karnataka, Delhi and Mumbai.
In Karnataka, the overall spectrum caps were reduced from 67.88 MHz to 65.40 MHz, despite the additional 2.5 MHz (1.25+1.25) in 800 MHz band and 10 MHz (5+5) of spectrum in 2100 MHz band put to auction.

Consequently, Airtel could only procure 17.6 MHz (8.8+8.8) spectrum despite returning 20 MHz (10+10) spectrum post expiry of licenses.

In Delhi, the spectrum caps were lowered despite an additional 10 MHz (5+5) of spectrum in 2100 MHz band and 5 MHz (2.5+2.5) in 800 MHz band put to auction. Airtel was not able to bid for 10 MHz (5+5) spectrum in 2100 MHz band despite its requirement and willingness. 10 MHz (5+5) spectrum in 2100 MHz band remained unsold post the auction leading to loss to the exchequer as well.

In Mumbai, despite the additional 10 MHz (5+5) spectrum in 800 MHz band and 10 MHz (5+5) in 2100 MHz band being put to auction, the spectrum cap was retained at 67.93 MHz. During the same period, the merger of Airtel and ABSPL was approved by DoT and Airtel was asked to surrender 2.47 MHz (1.235+1.235) of spectrum which would not have been required had the spectrum caps being raised considering the additional spectrum put to auction.

Reliance Jio had a different view

Reliance Jio Infocomm, the pan-India 4G operator, told TRAI that there is no justification for continuation of band-wise cap and only the spectrum-wise cap should be considered.

Idea Cellular and Reliance Communications earlier said the existing prescribed spectrum cap (25/50 rule) determined on the basis of the spectrum assigned in the respective band and also on the total spectrum assigned in all the bands should continue.

For determination of successful bidders in the auction, the first priority should be given to the TSP that does not already hold a block of 5 MHz contiguous spectrum in that band, and only after allocation is made to each such bidder who is bidding for its first contiguous block (first carrier) of 5 MHz in that specific band, the balance spectrum in that band should be made available for allocation to other bidders who already have a holding of 5 MHz contiguous block in that particular band, said Idea Cellular.

Baburajan K
[email protected]