Telecom Commission submits recommendations on new telecoms policy

19 Jan 2012

India’s Telecom Commission, the apex decision making body of the Department of Telecommunications (DoT), has reportedly recommended that the price for spectrum should, in the future, only be determined via auction. According to the Indian Economic Times, the commission has proposed that both frequencies assigned as part of a new concession and any additional spectrum granted to operators should be priced via a competitive sale process, and has submitted such recommendations to the telecoms minister Kapil Sibal. Citing unnamed sources, the report also claims that the Telecom Commission has stipulated that frequencies issued to an operator in excess of its start-up frequencies should be charged at market prices. Further, it is understood that the regulator has recommended that such charges should be levied not just against new spectrum allocations, but also to those cellco’s that already hold additional frequencies.

Alongside its recommendations regarding spectrum pricing, the submission on the in-development New Telecoms Policy (NTP) made by the Telecom Commission is also believed to include its thoughts on revised guidelines regarding mergers and acquisitions in the country’s telecoms sector. In this area the commission has suggested that the merger of entities in either the wireline or wireless sector should be allowed, subject to the combined entity’s market share not being more than 35%. Guidelines are, however, also expected to be framed for those cases where a merger would create a company with more than 35% market share in consultation with the Telecom Regulatory Authority of India (TRAI). Post-merger the recommendations stipulate that no company should hold more than 25% of the spectrum in any area.

Among the raft of recommendations made, another area covered by the commission’s submission is that of spectrum sharing, with the regulator saying that operators should be allowed to use frequencies of other players; it claims that such a move would promote the efficient utilisation of spectrum. The TRAI, it is noted, would be entrusted with carrying out a review of spectrum usage of spectrum and tasked with making recommendations in this regard.

Mr Sibal is now expected to examine all of the recommendations, before taking a final decision and subsequently seeking approval from the Union Cabinet for the proposals.