Sunday, July 12, 2015

SPECTRUM SHARING IN INDIA

SPECTRUM SHARING BRINGS ACCHE DIN FOR ALL

With Indian Cellular market crossing One Billion Mobile subscribers recently and with extensive splurge in use of data, pressure on Telecom Operators to provide better services and simultaneously increase its revenues are always the 24X7 concern for operators in India. But recent news brought cheer in operator’s lobby as DoT finalized its views on spectrum sharing and trading.

The government is expected to finalize most-awaited spectrum sharing and trading guidelines in three months”, said Telecom secretary Rakesh Garg on Thursday after meeting with Telecom Commission , the topmost decision making authority in Telecom ministry.

TRAI recommendations made to DoT on the same on 21st July 2014  got approved and now will be send to Cabinet for its final approval before getting implemented. India with second highest number of mobile subscribers, trailing after china, operates in 1/3rd  of the spectrum space as compared to ideal global standards.

Till date Operators were allowed to share passive infrastructure like mobile towers, which has helped them in reducing operational cost but not active infrastructure like spectrum but with Spectrum sharing and trading telecos can cut down theirs costs even more. Spectrum trading contributes to a more economically efficient use of frequencies. This is because a trade will only take place if the spectrum is worth more to the new user than it was to the old user, reflecting the greater economic benefit the new user expects to derive from its use. It will be a win-win situation for both major and minor operators. Major players like Bharti Airtel, Idea Cellular and Vodafone India can boost up their network to improve service without buying additional expensive airwaves through auctions. On the Other hand smaller players like Tata Teleservices, Reliance Communications and Aircel to do away with its underutilized airwaves.

Advantages and disadvantages to government, operators, and consumer?

Advantages for Government:

  1. Improved services from telcos from same allocated air space
  2. Post sharing, the spectrum usage charges increases by 0.5% of the Adjusted Gross Revenues (AGR).
Advantages for Operators:

  1. Reduction in Capex.
  2. Additional spectrum can be utilized without purchasing through expensive auctioning.
  3. Improved services.
Advantages for Consumers:

  1. Better quality of service and faster data speeds as bandwidth will increase.
  2. Reduction in call drops.
  3. Possibility of lower tariffs.

Shirish Patel
Malay Maniyar
Systems and Finance - Batch of 2016
Symbiosis Institute of Telecom Management, Pune