India to allow spectrum trading

Daily News

India's cabinet has approved regulatory changes to allow operators to trade mobile spectrum, but the industry is concerned that conditions attached could mute trading activity.

Cabinet has cleared spectrum trading rules to accompany the spectrum sharing norms announced last month, the Economic Timesreported.

But operators will only be able to trade spectrum at least two years after the airwaves have been allocated or acquired through a deal.

Operators seeking to trade spectrum will also need to convert spectrum into tradeable airwaves by paying a market price as a tax, as well as a transfer fee of 1% of the deal value or the prescribed market price for the spectrum.

Cellcos will still be subject to spectrum holding limits, and the proceeds from the trading of spectrum will be added to an operator's gross revenue for the purpose of calculating annual spectrum usage charges and license fees.

These last conditions could serve as a major deterrent to operators interested in trading spectrum. COAI has already objected to these terms, with the industry body's director general arguing that they will ensure that the regulatory change is unlikely to be a game changer.

The report also quotes EY global lead for telecom Prashant Singhal as stating that the conditions effectively impose a 13% levy on the seller of spectrum, which amounts to double taxation on an already significantly taxed industry.

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