The telecom department has made amends to the existing norms which governed spectrum holding for individual telecom operators. This move can be marked as a sign of encouragement since the Department of Telecom (DoT) has provided a sign of relief for the telcos, and a step towards consolidation in the sector. The new license norms now allow higher spectrum holding by the telecom operators. Previously there was a limit of 50% holding in a spectrum band above 1000 MHz frequency for the mobile operators, which has now been removed. Contrary to the previous rule which only allowed for 25% holding of the total spectrum allocated in service, the limit has now been raised to 35%.
The license amendment order which was dated May 30, 2018, read “The total spectrum held by the resultant entity shall not exceed 35% t of the total spectrum assigned for access, by way of auction or otherwise, in the concerned service area.”
According to PTI’s report, in the premium bands, however, which are below 1 GHz – 700 MHz, 800 MHz and 900 MHz bands, the operators won’t be allowed to hold more than 50% of radiowaves in the service area. The lower frequency band also remain expensive for the telcos to acquire. Previously, the 900 MHz band was used for providing 2G services when mobile telephony started in the country, but now the 4G services make use of all the spectrum bands. ??It’s also noteworthy that the reason behind the expensive cost of the lower frequency band is because of the increased coverage of mobile signals when they are transmitted from a lower frequency band.
The recent amends in the license norms will allow the telecom operators to hold two blocks of 3G spectrum that were auctioned in 2010 as result of the merger or any other permissible arrangement among the companies.
This new step by the DoT has been deemed as support to the merger of Idea and Vodafone whose combined holding was breaching spectrum caps in 900 MHz band across five telecom circles of Maharashtra, Gujarat, Kerala, Haryana and UP West under old rules as per the analysts’ report. ??A similar case was seen in Reliance Jio’s acquisition of RCom spectrum, where the combined holding was breaching the limits set by the previous rules.