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22-Nov2017

TRAI suggests removing cap on spectrum holding by telecom firms

In a move that will enhance mergers and acquisitions, the Telecom Regulatory Authority of India (TRAI) has suggested to remove the current intra-band cap on spectrum held by mobile operators within a particular band and instead, there should be a 50 percent limit on combined radiowave holding in efficient bands like 700 MHz, 800 MHz, and 900 MHz. It has also suggested to raise the limit for overall holding across all bands to 35 percent from 25 percent.

Both the suggestions, once accepted by the department of telecommunications (DoT), would provide a major relief for the soon-to -be-merged Idea Cellular and Vodafone, as they would have breached the spectrum cap in certain locations under the existing rules. It would also enable aggressive newcomer Reliance Jio to acquire more spectrum, if needed, in bands like 800 MHz. DoT had sought TRAI's views on whether the current norms -- 50 percent cap in a particular band and 25 percent limit for total spectrum held across all bands in a given circle -- should continue or need to be reviewed. In turn, the telecom regulator sought the views of the operators before coming out with its recommendations.

Explaining the rationale behind its recommendations, TRAI has said that the overall 25 percent ceiling on spectrum was imposed at a time when there were 6-10 telecom operators in a given telecom circle and noted that the number of telecom operators in a service area now had come down, following consolidation in the sector. Besides, it stated that the service providers are also free now to use any technology of their choice in any band or using multiple bands. It pointed out that as LTE (Long term Evolution) device ecosystem is evolving in each of the spectrum band, there is no real need to put spectrum cap in each spectrum band. However, it argued that imposing a cap in the sub-1GHz band was important as these are most optimal bands.  


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