TRAI Recommends Telecom Operators holding 2G, 3G, 4G (BWA) and CDMA Spectrum Should be Allowed to Trade the Spectrum

India’s telecom regulator  TRAI has finalized its recommendations on the ‘Working Guidelines on Spectrum Trading’ which allowing outright transfer of spectrum by telecom companies to other operators, but has suggested a bar on its leasing for now.

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As per the recommendations by TRAI, telecom operators holding spectrum across services – 2G, 3G, 4G (BWA) and CDMA, should be allowed to trade the radio-waves.

Telecom Regulatory Authority of India said in its recommendations on spectrum trading that “under spectrum trading, only outright transfer of spectrum is permitted, ie the ownership of the usage right is transferred to the buyer. Spectrum leasing is not permitted at this point of time.”

The salient features of the recommendations are given below:

• Spectrum trading will not alter the original validity period of spectrum assignment.
• For the present, Spectrum Trading shall be permitted only on a pan-LSA (Licensed Service Area) basis i.e. spectrum cannot be traded for a part of the LSA.
• The seller and the buyer shall be required to inform the Licensor regarding the spectrum trade, 6 weeks prior to the effective date of trade. However, no permission will be required from the Licensor/Government for Spectrum Trading.
• All spectrum bands earmarked for Access Services by the Licensor will be treated as tradable spectrum bands. Currently spectrum in 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz and 2500MHz spectrum bands have been allocated for Access Services.
• Only CMTS/UASL/UL (AS)/UL licensees shall be eligible to participate in the spectrum trading. The entire spectrum held by the licensee in a particular spectrum band within an LSA should be tradable i.e. it has either been assigned through an auction in the year 2010 or afterwards, or on which the TSP has already paid the prescribed market value (as decided by the Government from time to time) to the Government.
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A Telecom Service Provider (TSP) will not be permitted to trade any spectrum in the spectrum band in which it has acquired any spectrum through trading (or auction) for a period of 2 years from the effective date of transfer of spectrum (or effective date of assignment), i.e. TSP is required to hold spectrum for at least two years from the date it acquires the spectrum.

Inter-ministerial panel Telecom Commission had in October 2013 given in-principle approval to spectrum trading and it was cleared by the Empowered Group of Ministers. TRAI was then asked to provide detailed guidelines for trading.

As of now, only Government is allowed to allocate spectrum to telecom operators through auctions. Once the trading is allowed, it is expected to increase efficient use of radio-waves /spectrum by enabling telecom operators, who have a lower subscriber base or un-utilized spectrum to trade in it.

Now a Department of Telecom (DoT) committee will examine TRAI’s above guidelines after which Telecom Commission will take a call on it.