The Cabinet cleared a proposal on Wednesday that had suggested allowing telcos to share spectrum in the same band in order to reduce call drops. Telcos will now be able to share their unused spectrum thereby enhancing network quality and reducing operational costs. There was no decision on spectrum trading norms, which is expected to lead to greater consolidation in the sector.
"Fulfilling the government's commitment to improve spectral efficiency and quality of service, which is very essential to fulfil the dream of Digital India, the Union Cabinet... today gave its approval to the guidelines on spectrum sharing arising from the recommendations of the Telecom Regulatory Authority of India (Trai)," an official release said.
Spectrum sharing would be allowed only where both the licensees have spectrum in the same band and leasing of spectrum will not be permitted, the statement added. Besides, sharing may be permitted where both entities possess spectrum for which market price has been paid. Spectrum usage charge (SUC) will be levied on the entire spectrum holding in a particular band and all access spectrum, including traded spectrum, will be sharable.
According to the release, SUC rate of each of the licensees post-sharing shall increase by 0.5 per cent of aggregate gross revenue. However, in respect of spectrum in 800 MHz (CDMA) acquired in the auction held in March 2013, sharing of spectrum shall be permitted only if differential of latest auction price and March 2013 auction price on prorata basis on the balance period of right to use the spectrum is paid.
Sharing may be permitted where both sharing entities are having administratively allotted spectrum and where one entity has spectrum acquired through auction or liberalised spectrum and the other has spectrum allotted administratively, sharing shall be permitted only after spectrum charges are paid for liberalising the administratively allocated spectrum.