Don't see spectrum sharing norms as game changer: BoFA ML

Spectrum sharing norms approved by the government are not going to be a game changer for the Indian telecom sector as is being expected by industry players and investors, a BoFA ML report said today.
"We do not consider the current spectrum norms to be a game changer, versus expectations of industry participants/ investors that it may accelerate consolidation, as we do not expect any material uptake in sharing spectrum by telcos," said the Bank of America Merrill Lynch report.
Government on Wednesday approved long awaited spectrum sharing guidelines that provide an alternative of auction to companies which need more radiowaves to decongest networks for good quality phone call services.

Sharing of spectrum may be permitted where both entities possess spectrum for which market price has been paid. It would be allowed only among those companies where both the telecom operators have spectrum in the same band and leasing of spectrum will not be permitted, it said.
"We believe that under current norms sharing would be possible if larger telcos like Bharti, Idea end up sharing 1800 MHz spectrum of smaller telcos (in the administered band) to enhance 2G capacity/coverage and hence reduce the call drops. However this would be possible only if the spectrum of larger telcos is contiguous with spectrum of smaller telcos," the report said.

It added that theoretically Reliance Jio could share 800 megahhertz from other telecom operators who have liberalised 800 MHz spectrum but only in circles where Jio has 800 MHz and where the spectrum is contiguous with other telcos.

"We remain uncertain if any of these scenarios would pan out. We do not expect to see any sharing in 900 MHz and 2100 MHz," the report said.
The industry was expecting spectrum trading guidelines alongwith the sharing norms.
"We consider lack of spectrum trading norms, which were widely expected with sharing norms, to be a disappointment," the report said.
As of now, only government is allowed to allocate spectrum to telecom firms through auctions. The trading of spectrum is expected to increase efficient use of radiowaves by enabling telecom operators, who have a lower subscriber base or unutilised spectrum, to trade in it.

Vodafone, Uninor and Videocon have appreciated the guidelines.