SPECTRUM CAPS MAY GO

The Telecom Regulatory Authority of India, in a recent decision, which appears to favour larger telecom players, suggested that the government relax existing norms on spectrum holding. If the government accepts, operators will be allowed to own 100 per cent spectrum in four bands – 1800 megahertz (MHz), 2100 MHz, 2300 MHz and 2500 MHz – and 50 per cent in other three bands – 700 MHz, 800 MHz and 900 MHz – in each of the telecom circles. Besides this, the overall spectrum holding cap in each circle will be increased from 25 per cent to 35 per cent. There are currently 22 telecom circles.

Spectrum caps are designed to prevent any single operator from becoming too large to dominate a particular market, and therefore, price its tariffs significantly high. Removing the cap may augur well for larger operators but the clear downside is that smaller players may not be able to compete.