New spectrum norms no game-changers

Although the spectrum sharing norms approved by the government may help in reducing the menace of call drops in India, the levy of additional usage charge and disallowing trading of airwaves have dampened the mood of telecom stakeholders who feel the new norms fall short of being game-changers.

"The decision to permit spectrum sharing will have a marginal effect on the industry. Admittedly, spectrum sharing aids efficient use of spectrum. However, the extent to which it will do so, is questionable," Mahesh Uppal, director of telecom consultancy firm Com First told IANS.

The guidelines received the go-ahead on Wednesday in a cabinet meeting presided over by Prime Minister Narendra Modi. The Telecom Regulatory Authority of India (TRAI) had in mid-June sent its recommendations on sharing of airwaves to the Telecom Commission. This was welcomed.

But operators neither liked the idea of a levy, nor the proposal for sharing among similarly-acquired airwaves – like auction or allocation. "We do not consider the current spectrum norms to be a game-changer as we do not expect any material uptake in sharing of spectrum by telcos. We consider lack of spectrum trading norms to be a disappointment," Bank of America Merrill Lynch said in statement.

The industry stakeholders expected the government to also take decisions on spectrum trading. Kotak Institutional Equities saw the norms as a positive step for incumbents. "Operators however, would need to find a balance between the costs of sharing with the benefits (a cost-efficient mechanism to enhance network capacity and quality)," it said.

"TRAI had recommended that all types of spectrum, whether administratively acquired or auctioned, should be allowed to be shared. However, in the guidelines, the government has said only similarly-acquired spectrum can be shared without payment," Com First director Uppal said. "Also, spectrum sharing is not free."

Vodafone India, however, said the sharing guidelines was a positive step forward. "The decision on spectrum-sharing guidelines is a step in the right direction for ushering in Digital India," said its India spokesperson.

"It's a great move. But it is limited to sharing. Nonetheless, it will address the capacity issues faced by end-users," Rishi Tejpal, principal research analyst with Gartner India told IANS, while hoping that the government would also take a positive stand on trading and leasing.

As regards leasing, the new norms clearly disallow such commercial terms. "For the purpose of charging SUC (spectrum usage charge), licensees shall be considered as sharing their entire spectrum holding in the particular band in the entire licensed service area."

Uppal said a big problem faced by service providers in India today was the fragmented nature of spectrum allotted to them. "Hence, even though the government has allowed sharing, it does not mean it can be shared effectively in every case. The amount the telecom players pay to share spectrum, along with the problem of fragmentation, will reduce the value of spectrum-sharing."

By Aparajita Gupta