New Telecom Sector Guidelines

What is the issue?

• Telecom Regulatory Authority of India (TRAI) is reviewing whether the in-band spectrum cap of 50% should be relaxed.
• It is also considering raising the overall spectrum holding by an operator from the current maximum of 25%.

What were opinions of the telecom service providers?

• In 2015, a majority of telecom companies had wanted both the overall cap and the in band cap to continue.
• Subsequently, the cap on spectrum holding that a service provider might acquire through auction or otherwise was retained.
• The regulator reasoned that retaining the cap was to ensure a level playing field and prevent the emergence of monopolies.
• A consultation process between the regulator and the companies has brought to the fore, sharp divisions within the industry.
• It is now up to the regulator to take a call.

How does the future look?

• The dynamics of the telecom sector have changed considerably since 2015 and India is heading towards a technology-neutral era.
• Hence, any policy guidelines linked to band-specific spectrum holding may be limiting for the industry and the consumer.
• But the present review is on the behest of an inter-ministerial committee that wants to address the financial stress in the sector.
• Hence, the declining telecom profitability and the consolidation in the sector should be factored in decisions.
• The regulator should be very conscious that its recommendation doesn’t end up disrupting the sector further.
• Notably, currently, most telecom companies aren’t keen on enhancing their spectrum holding.

Source: Business Line