Indian's telecom regulator is reportedly mulling over removing the 50% limit on spectrum holdings within a particular band, a move that would allow more bidders for a band at the next auction, effectively helping the government boost revenue. However, the biggest beneficiary of this move, if takes place, would be Vodafone and Idea that would be able to retain all their spectrum once their merger is complete.
The move would also allow the Mukesh Ambani-led telco, Reliance Jio, to acquire more airwaves in 850 MHz band of Anil Ambani-led Reliance Communications, according to a report by the Economic Times. Trai officials reckon that the move could lead to more spectrum at the disposal of a telco that could use it for multiple purposes.
"The authority may also consider raising by a limited amount the overall limit of spectrum owned in a circle beyond 25% but enough to keep a check on monopolisation," the report said.
"The 50% cap will be removed most likely...spectrum is now liberalised and any band can be used for offering any service, so removing the cap will give a lot of flexibility to players, and lead to better utilisation of spectrum," a source was quoted as saying by the publication.
The telecom regulator had earlier sought service providers’ views on spectrum caps through a closed consultation process. As per rules, spectrum cap is the limit of the spectrum telcos can hold for providing services. The cap is 25% of the overall airwaves assigned in a telecom circle to a telco, and 50% in a particular spectrum band.
The Telecom Commission, the highest decision-making body of the department, said last month that spectrum limits should be looked at by the regulator after it received recommendations from the inter-ministerial group that was looking into the financial health of the debt-laden sector.
The report said that the Trai may give its recommendations to the telecom department (DoT) by the month end. The DoT’s decision will go to cabinet for final approval.
In a note to the regulator, the Sunil Mittal-led telco earlier opposed any removal or relaxation of the upper limit on spectrum holding in a band from the present 50%, while the Mukesh Ambani-led Jio said the 50% in-band cap should be done away with, as technology has become spectrum-agnostic.
