TRAI Recommends Sharing of Telecom Spectrum

The Telecom Regulatory Authority of India ("TRAI") issued its recommendations on the “Guidelines on Spectrum Sharing” on July 21, 2014 ("Recommendations") vide Press Release No. 41/2014.

In February 2014, a Steering Committee, consisting of senior officers of TRAI and representatives of various telecom service providers was constituted that made certain suggestions to TRAI, based on which the present Recommendations have been issued. The said Committee had been constituted to frame guidelines for spectrum sharing. In the past, the telecom operators were allowed to share only passive infrastructure, such as mobile towers, but not active infrastructure, like spectrum.

In terms of the Recommendations, ‘spectrum sharing’ refers to an arrangement between two access licensees, where both licensees having access spectrum in the same band pool their spectrum in the same License Service Area for their simultaneous use, using a common Radio Access Network.

The major Recommendations of the TRAI for sharing of spectrum can be summarised as under:

 Two licensees are allowed to share spectrum in the bands of 800, 900, 1800, 2100, 2300 and 2500 MHz, provided both the licensees have spectrum in the same band. This implies the sharing of previously banned 3G spectrum.

If any one or both of the licensees, sharing their spectrum, have administratively assigned spectrum in the bands of 800, 900 and 1800 MHz, then after sharing, the said licensees will be permitted to provide only those services, which can be provided through administratively held spectrum.

 In case both licensees are sharing the spectrum, which has either been assigned through an auction in the year 2010 onwards or on which the prescribed market value has been paid, the said licensees can offer services using technologies, which they can independently provide through their own spectrum holding.  A portion of additional capacity shall be counted for applying the prescribed spectrum caps of 25% of total spectrum assigned and 50% in a band. 50% of spectrum held by one telecom operator in the spectrum band being shared will be considered as additional spectrum for the other.  Two licensees willing to share their spectrum shall inform the DoT while entering into the spectrum sharing agreement  Leasing of spectrum is specifically prohibited.  The spectrum usage charge rate of each of the licensees post sharing shall increase by 0.5% of the adjusted gross revenue, since spectrum sharing results in additional quantity of spectrum.

The basic objective of spectrum sharing is to provide an opportunity to telecom service providers to pool their spectrum holdings and gain better spectral efficiency.

The said Recommendations of TRAI will be considered by the DoT and placed before the Inter-Ministerial Panel Telecom Commission for its approval.

The move to allow sharing of all kinds of airwaves, if approved by the Government, will benefit incumbent players like Airtel, Vodafone, Idea Cellular, Reliance Communications, Aircel and Tata Teleservices to bring down cost of spectrum ownership.