Government finally allows spectrum sharing between operators, but not leasing of spectrum

The union cabinet chaired by Prime Minister Narendra Modi on wednesday gave clearance to long awaited norms for spectrum sharing between telecom operators. The spectrum trading guidelines have yet to get clearance as the government has decided to take it up separately. Sharing of spectrum, a key demand of the industry, will be allowed in service areas where both the companies have airwaves in the same band. And for computing spectrum usage charges (SUC), the norms stipulate the inclusion of the entire spectrum holding in the band for the operators, a condition that is not being taken well by the key players. SUC rate of each company post-sharing will increase by 0.5% of their Aggregate Gross Revenue (AGR), the government stipulated.

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Telecom companies and industry associations such as Cellular Operators Association of India (COAI) have often blamed paucity of spectrum for the growing menace of call drops and poor network connectivity in the country. Sharing and trading of spectrum, which have been long awaited, are among the key solutions that operators have long lobbied for as an answer to the problems. “This will allow telecom companies to expand and grow further,” Rajan Matthews, Director General, Cellular Operators Association of India told CNBC-TV18.

Uninor, the Indian arm of Norwegian telecom operator Telenor, said customer experience will benefit from the move. “We applaud the clearance of the spectrum sharing norms. This was a much-awaited regulation and with this operators like Uninor will be able to optimize use of spectrum as well as offer a superior customer experience both on voice and internet,” a senior company official said to Times of India. Vodafone, the country’s second-biggest operator, also welcomed the move. “It is a step in the right direction for ushering in digital India,” a spokesperson said.