Trai for trading in spectrum bought only via auction

Tags: News

Regulator favours 3-year ban on airwaves trading by any entity

The Telecom Regulatory Authority of India (Trai) may restrict trading in spectrum to companies that obtain airwaves at auctions or pay the market value for them.

Trai chairman Rahul Khullar may also limit the flexibility for trading in spectrum to companies that bid for airwaves in 900 mhz and 1800 mhz bands scheduled for February 3.

The regulator may recommend a three-year ban on spectrum trading by an entity arising from a merger or acquisition. This is to prevent premium sale of airwaves on the sly. Till now, trading in spectrum has been the exclusive preserve of the Union government.

Khullar has reportedly said at a meeting with telecom companies’ chief executives that the Trai recommendations would be made before the weekend. The Telecom Commission will review these recommendations on January 25 before they are notified.

Those who attended are Bharti Airtel joint MD & CEO Gopal Vittal, Reliance Jio Infocomm MD Sandip Das, MTS India chief executive Dmitry Shukov, Uninor chief Morten Karlsen Sorby and Videocon Telecom chief executive Arvind Bali.

Vodafone MD and CEO Marten Pieters, Idea Celluar’s Himanshu Kapania and Tata Teleservices MD Srinath Narasimhan didn’t join the discussions.

After the meeting, Bali told reporters that operators presented their views. Bali wanted Trai to take up the issue of spectrum sharing across circles.

PwC India’s telecom practice leader Mohammad Chowdhury told FC, “Trading will allow firms to access more spectrum. Detailed rules should ensure an equitable and non-discriminatory deal for all, given that some firms have been allotted spectrum at administered prices, while others bought it at market rates.”

Credit Suisse cautioned that some uncertainty will always remain though Trai is attempting to introduce more clarity in spectrum pricing, spectrum trading, usage charges, re-farming, mergers and acquisitions.

Last October a ministerial group had agreed to allow spectrum trading among the service providers. This was based on Trai’s initial recommendation. The ministerial group will meet on Monday to take a final call on both spectrum trading and annual spectrum usage charge.

If after these are announced some companies want to withdraw from the auction can do so by the evening of that day.

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