In what will provide a major boost to new telecom operators, the Department of Telecommunications (DoT) is considering a move to allow operators to share spectrum. “We are evolving the discussions on permitting spectrum sharing. Hopefully, in the next month or two, we should see some success,” Minister of State for Communications and IT Jyotiraditya Scindia said on the sidelines of an event here.
The DoT has already allowed the operators to share both passive infrastructure like towers and active infrastructure like electronics. This has helped them in reducing capital investment.
Scindia’s statement is, however, contrary to that of Telecom Secretary Siddharth Behura, who yesterday said that he was not aware of any such proposal under discussion.
The move would benefit new operators who get an initial upfront allocation of a spectrum of 4.4 MHz, which they will not require in the initial stages of scaling up operations and can share it with incumbents.
“With the rapid growth in the mobile industry, wireless activities will require more spectrum. So, this spectrum sharing move will not only benefit the new players, who have spectrum only in a few circles at present, and will take some time in rolling out pan-Indian services,” says Mahesh Uppal, telecom analyst and director, Com First (India).
“It will also benefit the existing players in the long run when they need more spectrum to control their growing traffic, especially in the prime circles.”
Senior members of the Cellular Operators Association of India (COAI) too have not objected to the move. Says a senior executive in a leading GSM company and a key member of the association: “It is mutually beneficial because incumbents who have limited spectrum, especially in metros, can now resolve their shortage by sharing spectrum with new operators. The new operators get an additional source of revenue as they won’t require in the initial years as they scale up the entire spectrum.”
Romal Shetty, executive director, KPMG Advisory, says: “This is a good revenue driver for the new telecom players who will take some time in rolling out their own services. This could also provide additional income before they can earn substantial revenues from their own telecom services.”
The DoT recently allotted spectrum to CDMA and GSM operators, including Unitech Wireless, Datacom, Swan Telecom and Shyam Telcom-Sistema, for numerous circles across the country to roll out operations. Many new players have also received spectrum in circles like Delhi and Mumbai.
The Telecom Regulatory Authority of India (Trai) has also recommended permitting mobile virtual network operators (MVNO) which can buy time or lease infrastructure of existing licensed operators and provide services under their own brand. However, sharing of spectrum was not recommended under this policy.
