Operators in India will now be able to trade mobile airwave spectrum with rivals after gaining cabinet approval for the plans earlier today.
The move, which is designed to improve mobile service in the country, will enable mobile carriers to buy or lend unused airwaves from rivals in all bands. End users in particular will hope the reforms will ease the amount of dropped calls in the country, which has become a major issue for operators over the past year.
Speaking to the Economic Times of India after cabinet gave the nod, telecoms minister Ravi Prasad said operators needed to inform the government “45 days before commencing trading”.
“We have approved the spectrum trading norms today,” he said. “Now the telecoms companies can trade spectrum among themselves.”
The cabinet’s decision comes after the country’s telecoms commission approved spectrum trading and sharing guidelines in June, following recommendations from the Telecom Regulatory Authority of India (TRAI).
The government then approved spectrum sharing guidelines last month, but delayed its decision on trading until now.
Prasad said that spectrum trading could also resolve the problem of fragmented spectrum holding in the country, while also indicate a market rate for the airwaves. Previously, spectrum value has only been determined by auctions, which are controlled by the government.
The buyer of spectrum will be subject to a 1 per cent trading fee, “which will be calculated based on market rate or previous auction price”, added Prasad.
India is the second largest global mobile market by customers, with phone and data usage continuing to surge. According to Cisco, the number of smartphone users in India stood at 140 million in 2014, which is expected to reach 651 million in 2019.