New policy rejects 3G spectrum sharing
16-02-2012
10-year licensing period will affect balance sheets and tariffs
The New Telecom Policy announced by communications minister Kapil Sibal yesterday would be a dampener for 3G operators such as Vodafone, Idea Cellular and Bharti, which had signed roaming agreements to share 3G spectrum in circles where they had no spectrum.
The three operators had challenged an earlier government decision to this effect before the TDSAT. Operators had forked out Rs 65,000 crore for 3G spectrum, and none was able to get pan-India spectrum. Many were hoping the government would liberalise the sharing of 3G spectrum.
On renewal of licenses, Sibal said the renewal of licence would be done for 10 years.
The policy allows mergers between telecom companies with a combined market share of 35 per cent Operators can now share 2G spectrum only in the same service area and those sharing it should hold spectrum. It means operators having spectrum in a few circles cannot enter into roaming agreements in circles where they do not. The sharing will initially be allowed for five years and could be renewed for another five on terms to be prescribed.
Currently, mergers are allowed only if the combined market share of the entities does not exceed 30 per cent. That has been raised to 35 per cent. The modalities for mergers in case of a combined market share of 35-60 per cent will be finalised after Trai recommendations. Under the new rules, the combined entity can hold 25 per cent of the total spectrum in a circle.
The department of telecom (DoT) has prescribed a limit of 2x8 MHz to be assigned to a GSM service provider and 2x5 MHz for CDMA players while renewing licences for another 10 years. Taking into consideration the higher density in the two key metros of Delhi and Mumbai, the limit will be 2x10 MHz and 2x6.25 MHz for GSM and CDMA players, respectively.
An operator can acquire additional spectrum beyond these prescribed limits through a market mechanism. Operators keen to extend the licence will have to pay a fee of Rs 2 crore for metro and 'A' circles, Rs 1 crore for 'B' circles and Rs 50 lakh for 'C' circles. Earlier, the operators were assigned spectrum based on subscriber-linked criteria. DoT has accepted the recommendation for refarming of spectrum but spectrum trading and leasing have not been allowed. On the contentious issue of incumbent operators having to pay a one-time charge for extra spectrum held by them beyond 6.2 MHz, Sibal said a decision would be taken later in view of the Supreme Court judgment that cancelled 122 licences issued in 2008.
From Business Standard
The New Telecom Policy announced by communications minister Kapil Sibal yesterday would be a dampener for 3G operators such as Vodafone, Idea Cellular and Bharti, which had signed roaming agreements to share 3G spectrum in circles where they had no spectrum.
The three operators had challenged an earlier government decision to this effect before the TDSAT. Operators had forked out Rs 65,000 crore for 3G spectrum, and none was able to get pan-India spectrum. Many were hoping the government would liberalise the sharing of 3G spectrum.
On renewal of licenses, Sibal said the renewal of licence would be done for 10 years.
The policy allows mergers between telecom companies with a combined market share of 35 per cent Operators can now share 2G spectrum only in the same service area and those sharing it should hold spectrum. It means operators having spectrum in a few circles cannot enter into roaming agreements in circles where they do not. The sharing will initially be allowed for five years and could be renewed for another five on terms to be prescribed.
Currently, mergers are allowed only if the combined market share of the entities does not exceed 30 per cent. That has been raised to 35 per cent. The modalities for mergers in case of a combined market share of 35-60 per cent will be finalised after Trai recommendations. Under the new rules, the combined entity can hold 25 per cent of the total spectrum in a circle.
The department of telecom (DoT) has prescribed a limit of 2x8 MHz to be assigned to a GSM service provider and 2x5 MHz for CDMA players while renewing licences for another 10 years. Taking into consideration the higher density in the two key metros of Delhi and Mumbai, the limit will be 2x10 MHz and 2x6.25 MHz for GSM and CDMA players, respectively.
An operator can acquire additional spectrum beyond these prescribed limits through a market mechanism. Operators keen to extend the licence will have to pay a fee of Rs 2 crore for metro and 'A' circles, Rs 1 crore for 'B' circles and Rs 50 lakh for 'C' circles. Earlier, the operators were assigned spectrum based on subscriber-linked criteria. DoT has accepted the recommendation for refarming of spectrum but spectrum trading and leasing have not been allowed. On the contentious issue of incumbent operators having to pay a one-time charge for extra spectrum held by them beyond 6.2 MHz, Sibal said a decision would be taken later in view of the Supreme Court judgment that cancelled 122 licences issued in 2008.
From Business Standard
