The Hindu Business Line : Ceiling on number of mobile operators unlikely

Regulator’s drive
May suggest strict measures for enabling operators to use spectrum efficiently
May freeze the amount of spectrum per operator to 6.2 Mhz and ask them to pay for additional frequency

Thomas K. Thomas

New Delhi, Aug. 14 The Telecom Regulatory Authority of India may not prescribe capping the number of mobile operators in the country in its recommendation to the Government, expected to be announced in the next one week.

TRAI is also likely to allow mixed use of technology which will enable CDMA operators to deploy GSM technology and vice-versa subject to availability of spectrum. This will benefit companies such as Reliance Communications which despite having a national CDMA network had applied for GSM spectrum.

While the telecom regulator is unlikely to put a cap on the number of operators, it may suggest stringent measures to make sure that the operators use the given spectrum efficiently. The Government had asked TRAI to look into the possibility of capping the number of operators in a circle given the scarcity of radio frequency. There are 7 to 8 operators per circle at present.

With subscriber base growing at more than 5 million new users per month, the operators are demanding additional frequency to accommodate the booming user base.

One of the possibilities that TRAI is looking at is asking the operators to pay up for additional spectrum. At present, cellular operators are given spectrum based on the subscriber base. TRAI may freeze the amount of spectrum per operator to 6.2 Mhz and then ask operators to pay for additional frequency.

Improving usage

The regulator is also likely to suggest ways to improve the utilisation of spectrum. It has already acknowledged in one of its earlier papers that the mobile operators had not put in place adequate network to make best use of the scarce radio waves.

While the regulator will not micro manage the operators network, it may suggest new technologies and improving in-building coverage.

Easing M&A norms

As part of its recommendations, the telecom regulator is also likely to suggest easing of the mergers and acquisition norms. According to TRAI sources, the telecom sector has not seen a single merger given the stringent rules. Therefore, some of the norms relating to cross holding and dominant market power are likely to be relaxed. At present a single promoter cannot have more than 10 per cent stake in two different companies in the same circle. This provision is likely to be done away with.

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