Telecom shares in demand

Shares of five telecom companies rose by 1.14% to 4.58% at 10:44 IST on BSE after the telecom sector regulator recommended allowing sharing of all categories of spectrum.

Bharti Airtel (up 4.58%), Idea Cellular (up 4.47%), Tata Teleservices (Maharashtra) (up 2.92%), Reliance Communications (up 2.72%) and MTNL (up 1.14%), edged higher.

The S&P BSE Sensex was up 213.39 points, or 0.83% at 25,928.56.

The Telecom Regulatory Authority of India (TRAI) on Monday, 21 July 2014, issued its recommendations on guidelines on spectrum sharing. It proposed allowing two telcos to share any category of similar spectrum in a circle, including airwaves allotted at administrative prices, and liberalised a cap on bandwidth that can be pooled in, suggestions that could ensure efficient use of resources, and cheaper voice and data services for users.

All access spectrum i.e. spectrum in the bands of 800/900/1800/2100/2300/2500 megahertz (MHz) will be sharable provided that both the licensees are having spectrum in the same band, TRAI said in a statement.

If any one of the two licensees, sharing their spectrum, has administratively assigned spectrum in that band, then after sharing, they will be permitted to provide only those services, which can be provided through administratively held spectrum, TRAI said.

The basic objective of spectrum sharing is to provide an opportunity to the telecom service providers (TSPs) to pool their spectrum holdings and gain the better spectral efficiency. Spectrum sharing would involve both the service providers utilising the spectrum. Leasing of spectrum is not permitted, TRAI added.

If both the licensees are sharing that spectrum which has either been assigned through an auction in the year 2010 or afterwards, or on which the licensee has already paid the prescribed market value (as decided by the Government from time to time) to the Government, they can offer services using all those technologies (namely GSM, CDMA, WCDMA, LTE etc), which they can independently provide through their own spectrum holding.

Considering the fact that spectrum sharing results in better spectral efficiency, a portion of additional capacity created needs to be counted for the purpose of applying the prescribed spectrum caps of 25% of total spectrum assigned and 50% in a band. For the limited purpose of applying the prescribed market caps, 50% of the spectrum held by the other licence in the band being shared shall be counted as the additional spectrum being held by the licensee.

Considering the fact that spectrum sharing results in additional quantity of spectrum with both the licensees to serve higher number of consumers, the spectrum usage charge (SUC) rate of each of the licensees post-sharing shall increase by 0.5% of adjusted gross revenue (AGR), TRAI said.

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