India to draw up telecom exit policy

Dylan Bushell-Embling
06 Sep 2011

India's Department of Telecom has been directed to formulate an exit policy to help some struggling mobile operators withdraw from the market.

The Telecom Commission has asked the Department to draft up what will be the first such policy for the nation's telecom sector, Times of Indiareported.

While it is too early to tell what shape the policy may take, it could allow operators to sell their spectrum licenses back to the government, or surrender their spectrum in exchange for concessions.

The policy will be aimed at newer mobile operators, such as those which had acquired spectrum in the controversial 2008 allocation. The government has been seeking ways to wind back the effects of the allocation, which contributed to overcrowding in the mobile market.

The DoT has repeatedly threatened to pull some of the licenses that were allocated, due to alleged failures to meet rollout obligations.

The large number of entrants has also contributed to spectrum shortages, another area the government is trying to tackle – with one unpopular proposal being a cap on the amount of spectrum a single operator can own.

With at least one new operator having already indicated its desire to surrender its license, an exit policy could reduce the spectrum strain significantly.

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