India's cabinet has approved new regulations allowing operators providing services within the same circle to reach spectrum sharing arrangements.
But while the development has been welcomed by India's mobile industry, the terms and conditions - including proposed extra charges – have not gone over so well.
The Union Cabinet has given approval to Trai's recommendations on allowing spectrum sharing, NDTV reported. The new norms will allow two licensees to share spectrum so long as they have airwaves in the same band.
On the other hand the cabinet has declined to approve rules that would have allowed operators to lease idle spectrum.
Operators engaging in spectrum sharing will have their spectrum usage charges (SUC) calculated as if they are sharing their entire holding in the spectrum band in the service area. The SUC for both operators will therefore increase by 0.5% of an operator's aggregate gross revenue.
Shared spectrum will also be counted as part of an operator's holdings while calculating the spectrum cap, and each licensee will have to pay a processing fee of 50,000 rupees ($766.50) for each service area on the commencement of sharing arrangements.
The Cellular Operators' Association of India (COAI) has welcomed the change, stating that it will help improve quality of services and alleviate call drop issues.
But operators have rankled at the idea of paying extra charges for spectrum sharing considering the huge sums raised through recent spectrum auctions.