DoT wants per-circle limit on spectrum allocation

The committee set up by the Department of Telecommunications to review the spectrum allocation policy has suggested that no operator should be allowed to own more than 25 per cent of the total available radio frequency in a circle.

DoT has decreed that ''A Unified Access Service licence holder cannot have spectrum holding of more than 25 per cent of the total assigned spectrum in the 2G spectrum bands in each licences service area, irrespective of mix technologies deployed,'' according to a Moneycontrol report.

''Spectrum may be transferred/merged in any quantity any time after assignment subject to the condition that the merged entity cannot have spectrum holding of more than 25 per cent of the total assigned spectrum in the 2G bands in each circle,'' the committee said in its report submitted to the government last week.

This will make mergers and acquisitions in the telecom sector even tougher. DoT officials said the move is aimed at preventing hoarding of spectrum by a single operator. The committee has also proposed to impose a spectrum transfer fee of Rs550 crore for a pan-India licence.

The committee has also capped the initial start-up spectrum to new players at 4.4 Mhz for GSM operators and at 2.5 Mhz for the CDMA operators. All fresh allocation after that will be done through auction. This will have an impact on the new players that got their licences in 2008.

Operators, including Reliance Communication, Swan and Shyam Sistema, may not get any additional spectrum, based on subscriber-linked criteria.

Meanwhile, the telecom industry wants the new government to tackle the issue of multiple levies on the sector on a priority basis, according to reports.

DoT is likely to slash the spectrum usage charges to a uniform 3 per cent of the operators' annual revenues, according to a Wireless News report. Mobile operators who are willing to pay a one-time fee for all excess radio frequencies they hold beyond the 6.2 MHz mark will be eligible for this reduction.

The one-time fee will be equivalent to the market value of the extra radio frequencies. The committee set up to resolve all spectrum-related controversies said that this one-time charge must be established through the upcoming 3G airwaves auctions, according to the report.