DoT to seek TRai views on spectrum trading

These include conditions and timing for permitting trading of spectrum obtained through auction, quantity of spectrum for trading by an operator and others

The Department of Telecommunications (DoT) will seek recommendations from the Telecom Regulatory Authority of India (Trai) on the much-talked-about issue of spectrum trading.

In a recent communication, DoT officials have agreed to seek reference from Trai on certain issues pertaining to spectrum trading.

These include conditions and timing for permitting trading of spectrum obtained through auction, quantity of spectrum for trading by an operator, revenue payable apart from legal, regulatory and technical frame work.

DoT has decided to seek Trai recommendation on the above mentioned issues after Montek Singh Ahluwalia, deputy chairman of the Planning Commission, has written to the communications and IT minister Kapil Sibal making a strong pitch to allow trading of spectrum.

In April, Alhuwalia had noted in his letter that the matter could be discussed by the empowered group of ministers (EGoM) on telecom headed by Finance Minister P Chidambaram. And the matter was then discussed at the EGoM meeting on June 26, 2013.

Ahluwalia, in his note, had also stated that the tradability of spectrum could not be allowed earlier as spectrum was being auctioned on the basis of an administered price. But, if it is auctioned on the clearly-stated basis that it is tradable, then any potential for gain through subsequent trading will be reflected in the auction price, he had mentioned.

He had also noted in his communication that tradability would ensure greater economic efficiency, resulting in higher revenues to the government on account of higher spectrum usage charges.

Trai has backed the idea of spectrum trading for many years. The National Telecom Policy of 2012 also favoured trading of airwaves. In its recommendation in April 2012, Trai had noted: “the authority is of the opinion that it is still pre-mature to allow spectrum trading and this issue may be taken up at a later date”, as spectrum was being auctioned at an administrative price that time.

At present, spectrum trading is allowed in Australia, Canada, New Zealand and some European countries.

If the Government finally decides to allow spectrum trading, the move could have significant repercussion on the telecom companies, which are neither allowed to trade nor share their spectrum under the current policy.