The Telecom Regulatory Authority of India (TRAI) on Tuesday recommended the Department of Telecommunications to consider revising the overall cap on spectrum held by telecom operators.
The telecom sector is currently undergoing consolidation and the number of Telecom Service Providers in a Licensed Service Area is likely to decrease.
"Overall spectrum cap of 25 percent was imposed at a time when there were 6-10 TSPs in a LSA", the statement said.
Thus, asking a TSP to acquire spectrum in a different band to deploy the same technology will increase the cost of the network with no real gains.
"Instead, there should be a cap of 50 per cent on the combined spectrum holding in the sub-l GHz bands (700 MHz, 800 MHz and 900 MHz bands)," it said in an official press release.
Sub-1 GHz bands are perceived as the most optimal bands to ensure availability of wireless broadband services over large areas with low population density.
The Government recently constituted an Inter-Ministerial Group (IMG) on "Stress in the balance sheet in Select Sectors".
The IMG, among others, reviewed the spectrum cap applicable for Telecom Service Providers.
IMG, in its report, stated that the issue of spectrum cap merits detailed examination and variety inputs from sectoral regulators.
In light of the IMG report, Department of Telecommunications had requested TRAI to provide its views on spectrum cap.