On first glance, the new recommendations on spectrum sharing by Telecom Regulatory Authority of India (TRAI) appear to be a bonanza for telcos. After all, if accepted, the recommendation would give a telco the option of having shared spectrum and hence go easy with the bidding.

The recommendation, however, comes with a few riders, which actually have the potential to lead the telcos into spending even more on spectrum.


One of the spectrum sharing conditions (recommendations) says that not more than two telcos could share spectrum in a given circle and that too in the same band. Further, both the telcos must have spectrum in the intended band in a given circle, to be able to enter into a sharing agreement.

If these recommendations are accepted, the 3G service providers in particular would be left with no other option but to acquire 3G spectrum in all the circles. Worse, many existing as well as planned arrangements to offer intra-circle roaming will lose the very basis itself until the parties involved have acquired at least some amount of 3G spectrum in all the circles.

For the government exchequer though, this would be good news, as it would ensure that spectrum blocks are not left unsold in any circle. And yes, those telcos who manage to acquire spectrum across all circles, the recommendations would be a boon, as they could then monetize the resource better through sharing even while their subscriber base is not strong enough.

Also, the recommendations would become long-term positives for telcos, especially when they are faced with capacity bottlenecks due to small spectrum block sizes that they often have to live with. But the notions of any immediate benefit coming to telcos would be unfounded.

To reiterate, the more immediate interest would be that 3G airwave auctions are a success…which is not bad either!

The article was first published on Light Reading India

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