Telecom operrators can start spectrum trading as DoT issues guidelines

The government, on Tuesday issued trading guidelines that will enable telecom operators to acquire radio waves for mobile services from other companies to improve the service quality and other requirements.

The latest move by the central government has been hailed as a positive move and help with the full and optimum utilization of the radio waves.

It will also help smaller telecom companies to raise capital. The move has been hailed by Vodafone India MD as a forward-looking move by the government.

Earlier, telecom companies had the only option of procuring airwaves in an auction that is conducted by the Department of Telecom (DOT) according to its convenience.

The move is also being seen by experts as an exit option for loss-making companies while it will benefit those companies who have a large user base and in need of extra bandwidth.

The DoT is expected to issue the guidelines for spectrum sharing between different companies while the implementation of the trading regulation will take some more time.

According to the guidelines, any telecom operator can sell its right to use a particular spectrum to another operator in full or partly at the level of telecom circle.

However, the guideline specifies that trading can be done only to presently allocated frequencies mentioned below:

  • 800 Mhz ( CDMA mobile services)
  • 900 Mhz (2G and 3G)
  • 1800 Mhz (2G and 4G)
  • 2100 Mhz (3G)
  • 2300 Mhz (4G)
  • 2500 Mhz (4G)

The company that purchases a particular spectrum from another operator will also acquire the liabilities related to spectra like network rollout and dues.

The operator must have completed at least two years after he had acquired a particular spectrum to sell it. The buyer will have to pay a transfer fee of one percent on the entire transaction amount.

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