Spectrum trading norms a forward looking move: Vodafone

Telecom companies believe they can now create greater efficiency and optimise spectrum in the ecosystem

Government's clearing the spectrum trading norms is a forward looking move that will allow better utilisation of radiowaves and help smaller telecom operators to raise capital, Vodafone India has said.

"We see this as a very forward looking move by the government," Vodafone India MD and CEO Sunil Sood said, adding that companies can now create greater efficiency and optimise the spectrum in the ecosystem.

It gives an option to some of the smaller players to actually raise capital because they have huge debt on their books, he said.

The Cabinet last week cleared spectrum trading guidelines under which telecom operators will be able to sell radiowaves to other service providers, a move that will help address the problem of spectrum shortage.

As of now only government is allowed to allocate spectrum to telecom firms through auctions.

According to some industry experts, telecom operators have been waiting for spectrum trading guidelines before they proceed with their consolidation plans.

The government had last month approved spectrum sharing guidelines aimed at addressing spectrum shortage in the country and allowing operators to mutually use radiowaves to provide services.

Asked if spectrum trading will help in consolidation in the sector, Sood said, "It depends... There has to be a seller and a buyer. By consolidation, I am talking about spectrum trading here, it's not actually companies merging but spectrum changing companies."

A report by Credit Suisse Research & Analytics has said the trading guidelines will not really lead to a significant consolidation and does not provide an easy exit route for the smaller players.