Govt issues guidelines to liberalise 2G spectrum

The Department of Telecom today issued guidelines to liberalise the 2G spectrum whereby operators will be able to offer latest mobile services, including 4G, using the same radiowaves.
The logjam between the government and incumbent operators on the issue, which has been under litigation, is now expected to seem some movement.
"Existing CMTS/UAS/UL with access service authorisation licensees may liberalise their entire administratively alloted spectrum holding in 800 Mhz and 1800 Mhz band in a service area for the balance validity period of right to use spectrum," the guidelines said.
The development is likely to benefit almost all incumbent telecom operators like Reliance Communications, Aircel, Tata Teleservices, Airtel, Vodafone and Idea Cellular. They hold spectrum that was allocated to them administratively along with their first licence at a price of Rs 1,658 crore.

It may also help companies take full benefit of spectrum sharing and trading guidelines as well as expedite the consolidation process in the industry.
"Administratively allocated spectrum in 800 Mhz and 1800 Mhz bands refers to the spectrum allotted prior to auction of right to use spectrum in November 2012," the guidelines said.

DoT had earlier raised demand of one-time spectrum charges (OTSC) on incumbent telecom operators cumulatively amounting to over Rs 31,000 crore for those interested in liberalising the radiowaves held by them.
Telecom operators have challenged the demand in various courts and the matter is still sub-judice.
In order to liberalise their spectrum, the companies would require to submit bank guarantee equal to the OTSC amount demanded by government till the matter is finally decided by the courts, the guidelines said.

The spectrum will be liberalised for the period of their right to use left as per licence terms held by the telecom operator. Telecom operator will have to pay auction determined price prorated for the balance validity period, as per the guidelines.
The government will levy latest auction determined price on the spectrum to be liberalised. In case auction price is more than one year old then the prevailing market rate would be determined by indexing the last auction price at the rate of SBI prime lending rate.
Telecom companies will be required to make payment within 30 days from the date demand note is issued to them.

Telecom operators interested in getting their spectrum liberalised will have to apply in writing with non-refundable fee of Rs 50,000.