Fearful of low returns from upcoming spectrum auctions, India’s Department of Telecommunications (DoT) – according to the Economic Times – is planning not to allow spectrum sharing and trading among operators for the time being.
A senior DoT official, quoted by the newspaper, said there are government concerns that spectrum sharing might encourage ‘cartelisation’ among operators.
Quoting another anonymous DoT source, the Economic Times reports that the telecoms department is “trying to understand the practices in other countries and see whether we need to allow sharing of spectrum at all”.
DoT has reportedly set up an internal committee to study the issue.
Without the sharing and trading of spectrum, Prashant Singhal, a partner at the Ernst & Young consultancy, believes not only that the cost of airwaves will rise but also lead to greater inefficiencies.
“Increasingly, operators are focusing their energies on certain target circles and in the remaining circles they can easily offer excess spectrum to another operator if sharing is permitted,” he told the Economic Times.
More encouragingly for India’s operators, TRAI, the country’s telecoms regulator, has recommended spectrum sharing to increase spectral efficiency.
The Economic Times further reports that, according to an earlier proposal considered by DoT, operators would have been allowed to pool their spectrum holding with a certain cap. They would then have to pay a spectrum-sharing charge to the government in return for cost-efficiencies achieved.
The government department, however, seems to have gone cold on the proposal.
In other spectrum news, India’s Comptroller and Auditor General has told DoT that Vodafone India should be asked to pay an additional INR5.49 billion ($92 million) for offering 3G services in 11 ‘circles’ (regions) where the company does not have spectrum.
In the absence of pan-Indian spectrum, Vodafone had entered into roaming agreements with Idea Cellular and Airtel to offer 3G services across the country using each other’s spectrum. According to the DoT, though roaming is permitted, such an intra-circle arrangement cannot be used to sell 3G connections in areas where the operators do not have spectrum.