Trai favours removing cap on spectrum holding by telcos

Telecom regulator Trai today recommended the removal of ceiling on spectrum held by mobile operators within a particular band, while suggesting a 50 per cent cap on combined radiowave holding in efficient bands like 700 MHz, 800 MHz and 900 MHz.

If these suggestions are accepted by the telecom department, they would provide a major relief for the soon-to -be-merged Idea Cellular and Vodafone, as they would have breached the spectrum caps in certain locations under the existing rules.

It would also enable aggressive newcomer Reliance Jio to pick up additional spectrum, if needed, in bands like 800 MHz.

The Telecom Regulatory Authority of India (Trai) has also suggested that the overall cap on holding spectrum should be raised from the current 25 per cent to 35 per cent.

"The current intra-band cap should be removed. Instead, there should be a cap of 50 per cent on the combined spectrum holding in the sub-1 GHz bands (700 MHz, 800 MHz, and 900 MHz bands)," Trai said in a statement.

The Department of Telecom had sought Trai's views on whether the current norms -- 50 per cent cap in a particular band and 25 per cent limit for total spectrum held across all bands in a given circle -- should continue or need to be reviewed.

This was done after an inter-ministerial group (IMG) constituted to look into the financial health of the sector recommended that the matter be referred to the regulator.

The telecom regulator, in turn, sought the views of the operators before coming out with its recommendations.

Explaining the rationale behind its recommendations for easing the spectrum norms, Trai said that the overall 25 per cent spectrum cap was imposed at a time when there were 6-10 telecom operators in a given telecom circle.

After the ongoing consolidation in the sector, the number of telecom operators in a service area has come down.

Besides, the service providers are also free now to use any technology of their choice in any band or using multiple bands.

"As LTE (Long term Evolution) device ecosystem is evolving in each of the spectrum band, there is no real need to put spectrum cap in each spectrum band," Trai said.

But imposing a cap in the sub-1GHz band was important as these are "most optimal bands", Trai argued.

"Therefore, spectrum in sub-1GHz range viz 700 MHz, 800 MHz and 900 MHz should be treated separately and special provisions have to be made to safeguard against creation of monopoly," Trai said.