Indian spectrum cap closer to reality

Dylan Bushell-Embling
02 Aug 2011

The industry reformed promised by Indian telecom minister Kapil Sibal are closer to completion, with the ministry's decision-making body approving a slew of proposed policy changes.

The wide-reaching changes include measures likely to have a major impact on the sector, such as capping the amount of spectrum one mobile operator can hold at 6.2MHz for GSM and 5MHz for CDMA operators, Economic Timesreported.

The commission also approved the introduction of a uniform license fee of 8.5% of mobile phone revenues. Currently license fees vary from between 6% and 10% depending on area of operation.

Under the proposed new regime, which Sibal has promised will be finalized and cleared by October, the duration of mobile phone licenses would also be cut in half to 10 years.

Licenses would also no longer be bundled with spectrum, which would instead be allocated at a price equivalent to the market value of spectrum at the time.

Incumbents such as Bharti Airtel, Vodafone Essar and Idea Cellular could be significantly put out by the new policies, as they hold up to 10MHz of 2G spectrum in many areas, but face having that cut to 6.2MHz after they renew their licenses.

Eleven mobile operators including Bharti will be renewing their licenses between 2014 and 2021.

But smaller players including Telenor-backed joint venture Uninor have also opposed the proposed policy changes, stating that they would their make business unviable.

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