DoT might freeze spectrum trading during auction

Some operators had earlier sought relaxation in overall spectrum holding limit of 25% to 33% or 40%

The department of telecommunications (DoT) is likely to put on hold any new applications for spectrum trading and sharing, after it starts the process for auction of airwaves. The freeze should be on till the sale ends.

According to sources, DoT secretary J S Deepak met officials on Wednesday to deliberate on this. They said as it would be difficult to calculate spectrum caps if an operator is participating in the auction, new deals were likely to be on hold till conclusion.

“A decision will be taken before the issuance of Notice Inviting Application (NIA) for the auction,” said one. The auction is likely to start in September.  In 2015, the hitherto biggest auction of airwaves ended after 19 days of fierce bidding that fetched Rs 1.1 lakh crore to the government.

In the guidelines, spectrum cap, which is the limit of radio waves a telecom operator can hold for providing wireless services, is 50 per cent in a band identified as fit for transmitting mobile signals and 25 per cent of the total such spectrum assigned in a telecom circle (there are 22 in the country).  

Some operators, including Bharti Airtel, had earlier sought to relax the overall spectrum holding limit of 25 per cent to 33 per cent or 40 per cent. However, the Telecom Regulatory Authority of India (Trai) did not propose any such relaxation in its recommendations for the auction.

After the announcement of spectrum sharing and trading guidelines, Airtel had said it would acquire that of Videocon Telecom in six circles and in eight circles of Aircel. Reliance Jio Infocomm and Reliance Communications have also entered into spectrum sharing and trading deals. The auctions will start once there is clarity on spectrum usage charge (SUC). With Trai not giving a specific recommendation on this, the issue is likely to be placed before the Union Cabinet by the end of this month.

Trai has proposed a revised formula to include the market-determined price and technical efficiency of the band for calculating weighted average in determining SUC. However, DoT officials say this would further complicate the matter.

SUC, one of the many levies operators pay to the government, has been a bone of contention.

It varies from five per cent to one per cent across bands. The government gets Rs 8,000-8,900 crore annually from SUC. The NIA will be issued only after there is clarity on it.