Videocon Telecom in talks with 3 companies for spectrum trading

Videocon Telecom
Videocon Telecommunications is in talks with three service providers for airwaves sharing and trading.

“We are already in active discussions with 3 telecom operators on exploring possibilities around spectrum sharing and spectrum trading, and now with the announcement of spectrum trading policy, the discussion will gain momentum and soon we will conclude the pact(s),” Videocon Telecommunications director and CEO Arvind Bali said in a statement.

“Now with the announcement of spectrum trading policy, the entire roadmap gets clear with already announced spectrum sharing and merger and acquisition policies. This will make decision making between operators very quick and soon we will see telcos signing pacts,” he added.

India on Wednesday approved the much-awaited norms for telecom companies to trade in radio frequency spectrum in a move that can go long way in consolidating this scarce resource, improve the quality of service and even fetch revenues for airwave-surplus companies.

Communications and IT Minister Ravi Shankar Prasad said: “Telecom companies only need to inform the government 45 days in advance before trading and they have to give an undertaking. The policy is expected to resolve the problem of fragmented spectrum holding in India.”

The move comes against the backdrop of another related decision taken last month — on spectrum sharing. Under these guidelines, companies in an area with the same band of spectrum could pool this active infrastructure.

The need was expressed since India allows spectrum to be assigned for 20 years, during which some operators are able to acquire the requisite number of subscribers to justify their holding, while others are saddled with excess resources.

“Overall, we are very thankful to the government for approving both spectrum sharing and trading norms. This will be very helpful to the industry,” said Rajan S. Mathews, director general of the Cellular Operators Association of India.

“But, it’s not a game changer. The spectrum cap will be a limiting factor,” Mathews said.

Mahesh Uppal, director of telecom consultancy firm Com First, also said the move will increase the flexibility in acquiring spectrum and will prove to be good news for the sector. “But it is difficult to quantify the benefit,” he added.

“Some players with underutilised or idle spectrum will be able to monetise it. Therefore, any added flexibility in spectrum use is welcome, unless it comes with new riders,” Uppal said.

Arpita Pal Agrawal, leader of telecom sector with PwC, said this was a welcome move for spectrum-starved industry and that it should help alleviate to a significant extent the ‘quality’ issues being faced by Indian customers. Yet, she hoped the norms will be simplified enough.