Despite recent proposals from Indian regulator TRAI (Telecom Regulatory Authority of India) allowing for spectrum trading between operators, leasing spectrum will not be permitted.
While this may not be a permanent measure, TRAI has stated that currently “only outright transfer of spectrum is permitted i.e. the ownership of the usage right is transferred to the buyer”.
TRAI’s proposals allow operators to trade spectrum without the requiring specific approval from the government, which will enable airwaves to be used more efficiently. For example, operators sitting on frequencies that they are unable to use – for either financial or technological reasons – will be able to trade it to interested parties.
The proposals cover all spectrum awarded in or after 2010, or bought at market value from the government. Operators will be required to notify the relevant authorities of any spectrum transfer deals 6 weeks prior to the trade taking place. They will only need to pay a 1% transfer fee, which will be calculated based on either the price at which the spectrum is sold or the market value.
Operators will not be able to obtain spectrum that equates to more than 25% of their total holding, nor will they be able to take control of more than 50% of the spectrum within a particular band or telecom circle. In addition, transferred spectrum must then be retained for two years before it can be resold.