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Indian Telecom Commission approves easing spectrum cap limits

Indian Telecom Commission approves easing spectrum cap limits

The Telecom Commission of India has given the go-ahead for TRAI’s proposals to relax the country’s limits on spectrum holdings.

The Telecom Regulatory Authority of India put forward proposals in November last year that would ease restrictions on the amount of spectrum that could be held by an operator in a given band, within a specific service area – of which India has 22, known as telecom circles.

The proposals would allow providers to hold more than 50% of the spectrum available in the 700MHz, 800MHz or 900MHz bands in any one circle, but for these bands combined, their maximum holding per circle would be capped at 50%.

In addition, TRAI recommended increasing the overall spectrum holding cap per circle from 25% to 35%. The suggestion is aimed at bringing about more consolidation, although a spate is currently underway following the 2016 market entry of Reliance Jio. The operator’s free service offers have caused tariffs to plummet, leaving operators burdened with debt.

COAI (Cellular Operators Association of India) director Rajan Mathews said: “We welcome the decision to increase the overall spectrum cap, as it will facilitate mergers and acquisitions in the sector.” The proposal has not yet been approved by India’s cabinet.

An increase in spectrum caps would be of immediate benefit to Vodafone India and Idea Cellular, which are currently in the process of merging to create a new market leader. However, there are several issues related to spectrum caps that are creating roadblocks for the $23.2 billion deal.