Trai recommends raising spectrum holding cap to 35%

The Telecom Regulatory Authority of India (Trai) on Tuesday suggested increasing the limit for holding radio spectrum by individual telecom firms to 35 per cent, from the current 25 per cent, in a move that would help an ongoing consolidation in the sector.

In its report to the Department of Telecommunications on 'Issues Relating to Spectrum Cap', the telecom regulator has also recommended removal of the current cap on intra-band spectrum holding.

It has suggested a 50 per cent cap on the combined spectrum holding in the sub-lGHz bands (700 MHz, 800 MHz and 900 MHz bands).

TRAI had sought comments from telecom service providers (TSPs) and inter alia

Trai noted that the overall spectrum cap of 25 per cent was imposed at a time when there were 6-10 telecom service providers in a licensed service area (LSA). But the number has come down to nearly half in the ongoing consolidation in the sector.

''The spectrum being assigned through auction is a liberalised spectrum. At present, more than 80 per cent of the spectrum held by various service providers is liberalised spectrum, wherein they can use any technology of their choice in any band or using multiple bands,'' Trai said.

The regulator noted that in the light of the LTE (long-term evolution) frequency device ecosystem evolving across all spectrum bands, there is no real need to put a spectrum cap on each band.

Trai also said since ''sub-1 GHz bands are perceived as the most optimal bands to ensure availability of wireless broadband services over large areas with a low population density.

''Therefore, spectrum in the sub-l GHz range should be treated separately, and special provisions have to be made to safeguard against creation of a monopoly.''

''In fact, asking a TSP to acquire spectrum in a different band to deploy the same technology, increases the cost of network with no real gains,'' the regulator said.

Trai's recommendation is necessary input for the inter-ministerial group (IMG) that is looking into the financial health of telecom service providers - 'Stress in Balance Sheet in Select Sectors'.

The IMG, among other things, has stated the issue required detailed examination and inputs from sectoral regulators. It has requested Trai to provide its views on the spectrum cap.