India redefining available bandwidth to allow greater spectrum holdings

Indian operators will soon be able to hold more spectrum within a telecom service area following an amendment to the measurement system.

The Department of Telecom’s decision-making body the Telecom Commission has recommended changing the way that the DoT calculates the total amount of available bandwidth within India’s 22 telecom circles. The new method will factor in all spectrum regardless of whether the airwaves are unsold, unused or returned to the DoT by operators.

Rajan Mathews, director-general of the Cellular Operators Association of India, said: “Expanding the definition of the amount of spectrum to be included is another way to make headroom for a consolidation and would be welcome.”

Currently, the spectrum-measuring regulation does not include returned spectrum as part of the total pool. This artificial reduction of the total amount of available airwaves in turn lowers the holding caps for each operator, as these are calculated by dividing an operator’s total spectrum by the full amount available in each circle. Operators may hold no more than 25% of one circle’s total amount, and no more than 50% of the spectrum in a specific band within a service area.

The new measuring method will therefore have a positive impact on spectrum caps, particularly as the DoT recently decided to freeze operator holding caps at their current level despite the recent approval of spectrum sharing and trading between operators.

Failing to increase the spectrum holding limits for operators was deemed a backwards move by analysts, as India is currently pushing for more effective use of its limited spectrum via consolidation. The lower caps will make it harder for the 2 largest players in a circle to trade or share spectrum freely, but if the commission’s decision is approved by the telecoms minister then there will be more leeway for operators to trade and share among themselves.

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