Sibal delinks spectrum from licences

In a major shift in spectrum allocation policy, Telecom Minister Kapil Sibal today announced that henceforth no licence would be issued bundled with spectrum and also the operators would have to pay a market price for an additional spectrum.

He also said that for new operators the contracted amount of spectrum would be 4.4 Mhz and for the incumbent players like Bharti, Vodafone and Idea the limit would be 6.2 Mhz.

"In future, the spectrum will not be bundled with licence. The licence to be issued to telecom operators will be in the nature of 'Unified Licence' and the licence holder will be free to offer any of the multifarious telecom services.

"In the event, the licence holder would like to offer wireless services, it will have to obtain spectrum through a market driven process," the minister said.

This means the new operators, if their licences are held valid, would have to pay a market price for the additional 1.8 Mhz of 2G spectrum and this may make their operations financially unviable.

While for the old operators, who are holding spectrum beyond 6.2 Mhz would have to pay market driven price for the extra airwaves.

These changes would be implemented with immediate effect, Sibal said.

"We need to seriously consider the adoption of an auction process for allocation and pricing of spectrum beyond 6.2 Mhz while ensuring that there is adequate competition in the auction process," Sibal told reporters here.

He also announced that there would be a uniform rate of revenue share to be paid by the operators as spectrum charge to the government as part of level playing field for all players.

These changes would be part of new telecom policy being framed by the Department of Telecom.