Telecom Commission accepts Trai proposal to raise spectrum cap for telcos

Telecom Commission has concurred with sectoral regulator Trai's suggestion to raise spectrum holding limit of mobile operators which will ease the exit route for operators under stress, an official source said on Tuesday.

Trai had recommended in December, that the ceiling on spectrum held by mobile operators within a particular band should be removed. It suggested a 50 per cent cap on combined radiowave holding in efficient bands like 700 MHz, 800 MHz and 900 MHz.

As per the current rules, no mobile service provider can hold more than 25 per cent spectrum, vital for transmitting signals, in an area and more than 50 per cent in a frequency band.

An official source said the Department of Telecom (DoT) will send drafts of the relief package cleared by the Telecom Commission based on the recommendations of an inter-ministerial panel to Cabinet this week for final approval.

Among the most prominent beneficiaries will be Vodafone India and Idea Cellular, which have already announced a merger of operations.

Based on the IMG recommendation, the Telecom Commission has approved extension of time period for the payment of spectrum bought in auctions by operators to 16 years from the current 10 years, as recommended by the IMG.

It had also approved the IMG recommendation to lower the interest rate on penalties paid by telecom operators by about 2 per cent.

The Telecom Commission also approved raising of Network for Spectrum project cost to Rs 246.64 billion from Rs 113.3 billion.

The move is expected to help the telecom companies that are looking at mergers and acquisitions but are not able to do so for fear of breaching the government-mandated cap in a circle.