India approves spectrum sharing rules

13 Aug 2015

The Indian government has approved proposals to allow operators to share spectrum within service areas, although no decision has been made regarding the sale or trading of spectrum whilst the leasing of spectrum has been forbidden, the Economic Times writes. The decision will allow operators to utilise more spectrum without the additional cost of purchasing the frequencies at auction and potentially enable cellcos to use their spectrum more efficiently. Telecom Minister Ravi Shankar Prasad commented on the development: ‘This will be a game changer for the industry. Some operators have a large customer base and less spectrum, whereas it is the opposite for others. Sharing will allow efficient utilisation of bandwidth and help address issues of call drop and call congestion.’

The new rules permit operators within the same circle to share spectrum within the same band, with several caveats. Non-auctioned spectrum should not be shared with auctioned frequencies unless the market price is paid for the former, with the government singling out the 800MHz band for special treatment, adding that for airwaves acquired in the March 2013 sale, sharing will only be allowed if the difference between the March 2013 and most recent (March 2015) auction price is paid. With regard to spectrum caps, operators will be treated as holding half of the shared spectrum. For example, if one operator holds 10MHz of spectrum and another 8MHz, the first would be treated as holding a total of 14MHz, whilst the latter would count as having 13MHz. Cellcos are not allowed to hold more than 25% of the total allocated spectrum in each circle, nor can they hold more than 50% of the allocated frequencies in a particular band in each circle. For the purposes of spectrum usage charges (SUCs), however, sharing operators are treated as sharing their entire spectrum holding in the bands in question. In the case above, for example, both operators would be charged for 18MHz. Further, cellcos will be subject to an additional SUC of 0.5% on shared spectrum.

Operators will be required to apply to the government for permission to share spectrum, with requests submitted at least 45 days ahead of the planned start date. A processing fee of INR50,000 (USD771) is also required from each operator per circle.