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Cabinet approves pan-India spectrum trading between service providers

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NEW DELHI: Spectrum trading is to be allowed between two access service providers and only outright transfer of right to use the spectrum from the seller to the buyer will be permitted. 

 

According to a decision taken by the Union Cabinet, close on the heels of the decision of spectrum sharing, spectrum trading will not alter the original validity period of spectrum assignment as applicable to the traded block of spectrum. 

 

The approved plan is according to a proposal of the Department of Telecommunications on guidelines for spectrum trading arising from the recommendations of the Telecom Regulatory Authority of India (TRAI) and is expected to transform the spectrum usage in the telecom sector.

 

The seller will clear all his dues prior to entering into any agreement for spectrum trading. Thereafter, any dues recoverable up to the effective date of transfer shall be the liability of the buyer. The Government shall, at its discretion, be entitled to recover the amount, if any, found recoverable subsequent to the effective date of the transfer, which was not known to the parties at the time of the effective date of transfer, from the buyer or seller, jointly or severally. 

 

A licensee will not be allowed to trade in spectrum if it has been established that the licensee had breached the terms and conditions of the licence and the Licensor has ordered for revocation/termination of its licence. 

 

Spectrum trading will be permitted only on a pan-LSA (Licensed Service Area) basis. In case the spectrum assigned to the seller is restricted to part of the LSA by the licensor, then, after trading, the rights and obligations of the seller for the remaining part of the LSA with regard to assignment of that spectrum shall also stand transferred to the buyer. Further, relevant provisions of NIA with respect to spectrum assignment in part of the LSA, which were applicable to seller before the spectrum trade, will apply to buyer subsequent to the spectrum trade.

 

All access spectrum bands earmarked for access services by the licensor will be treated as tradable spectrum bands. 

 

Only spectrum in the specified bands is permissible to be traded, which has either been assigned through an auction in 2010 or afterwards, or on which the Telecom Service Provider (TSP) has already paid the prescribed market value (as decided by the Government from time to time) to the Government. In respect of spectrum in 800 MHz band acquired in the auction held in March 2013, trading of spectrum shall be permitted only if the differential of the latest auction price and the March 2013 auction price on pro-rata basis on the balance period of right to use the spectrum is paid. 

 

In India, the spectrum assignment is made for a period of 20 years. During this period, some operators are able to acquire subscribers and grow at a faster rate as compared to other operators. This results in the spectrum lying un-utilised with some of the players while other operators face spectrum crunch as spectrum is a scare resource. In India, unlike other countries, the availability of the spectrum is relatively small. Therefore, spectrum sharing and spectrum trading are necessary to make up the inadequacy. It will not only improve the quality of service and but also help address the issue of call drops. 

 

Spectrum trading allows parties to transfer their spectrum rights and obligations to another party. This allows better spectrum usages as the idle spectrum from the hands of one service provider gets transferred to the other service provider who is facing spectrum crunch. This also improves customer satisfaction and services of the service provider acquiring spectrum. 

 

The buyer will be allowed to use the spectrum acquired in 800 MHz/1800 MHz band through trading to deploy any technology by combining it with their existing spectrum holding in the same band after converting their entire existing spectrum holding into liberalised spectrum in that band as per the prevalent terms and conditions.

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