Spectrum trading refers to trading of rights and obligations of a spectrum, which could be used for various communication needs including broadcasting, mobile telecom and emergency services. Spectrum trading will make telecom sector stronger. It allows the trading of unutilized spectrum. The major players of telecom sector Bharti Airtel, Vodafone India, Reliance Jio Infocomm and Idea Cellular will have spectrum in all areas whereas other small players may only have a regional presence. Hence they are getting the opportunity to exit the sector by selling their spectrum to bigger players.
Spectrum trading also helps the operator to choose their target area, by maintaining their presence, they can grow their market share there. It also leads to the disclosure of unutilized spectrum, which can be further used to grow infrastructure in their targeted areas of strategic importance. Considering spectrum as a natural resource, spectrum trading can lead us to efficient allocation of it compared to spectrum auction. As in spectrum auction there is high variance in price and also soaring prices is making remaining spectrum more expensive.
Telecom operators are trading unused spectrum to the operators who are facing spectrum congestion. In India, spectrum is considered a natural resource but it is relatively small which makes it a scarce resource. Hence spectrum trading will improve quality of service (QOS) and help the issue of call drops. It will also allow better spectrum usage. Hence customer satisfaction and service from the operators will improve. For instance, 800 MHz band, which uses CDMA technology can also have 4G services. So with the rise of 4G services in India one can trade a part of their 800 MHz band at a high price for 4G services. This escalates their revenue also.
Spectrum trading is considered as economically efficient because trade will only take place if spectrum is worth more to the new operator than the old one. As liberalization brings in new technologies and innovations to the market, trading allows better spectrum utilization. Hence trading is only effective when merged with liberalization. This factors provides customer with more choice. Moreover, spectrum trading uses natural resource of our country that is spectrum more effectively and with proper measures.
Devanshi Jhaveri
Batch 2016-18
Symbiosis Institute of Telecom Management
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