In a move which could well pave the path for further consolidation in the crowded Indian telecom sector, the Telecom commission the highest decision making authority gave its in principle approval to TRAI’s recommendations on the calculation of spectrum caps reports ET. The consolidation in the Indian telecom market which started with the merger of Rcom and MTS had hit a roadblock as larger players like Bharti Airtel and Vodafone India were at a position whereby the current spectrum cap norms would not let them acquire further spectrum through trading and sharing agreements with smaller telcos or other incumbent operators without hitting the spectrum cap.

The current norms dictate that an operator can hold a maximum of 25% of the total spectrum allotted in a particular circle in all spectrum bands (850, 900, 1800, 2100, 2300, 2500 MHz) put together and a maximum of 50% of the total spectrum allotted in particular band in a circle. The recommendations of TRAI say that there is no need to change the 25% and 50% cap limits but for the sake of calculation DOT should consider not just the spectrum which is allotted to the telecom operators but should also include the total spectrum which was put for sale but remained unsold in an auction or was allotted to an operator who later surrendered it back to the government. The calculation should however not include the spectrum which has been earmarked for telecommunication purpose but has still not been vacated by Defence ministry or Information and broadcasting ministry till it has been officially put up for auction by DOT.

Since the recommendations have been approved by the telecom commission, DOT will be including the new clause in the notice inviting applications for future auctions. The new spectrum holding cap rules will enable Airtel to acquire an additional 5MHz of spectrum in Delhi circle in either 1800 MHz or 2100 MHz bands and also additional spectrum in nine more telecom circles including Andhra Pradesh, Bihar, Karnataka, Kolkata and Tamil Nadu. Vodafone will be able to acquire more blocks of spectrum through trading in Delhi, Gujarat, Karnataka and Mumbai. It will help Idea Cellular acquire more blocks spectrum through trading in 7 of the 22 circles which include Delhi, Gujarat, Mumbai and Maharashtra.