Spectrum-sharing norms disappointing; prefer roaming arrangement, says industry

The spectrum sharing guidelines issued by the Centre on Wednesday have disappointed operators, with most of them saying that they would prefer to do a roaming deal amongst themselves. The sharing rules put stringent conditions that make it less attractive.

“Intra-circle roaming arrangements, which have been legalised by the telecom tribunal, is a way of spectrum sharing and is being done without any restrictions like making additional payments to the Government.

“The new spectrum sharing guidelines do not change anything on ground,” said a Delhi-based telecom company.

Spectrum sharing would be allowed only for telcos where both companies have spectrum in the same band.

If an operator has administratively acquired spectrum (allocated on subscriber-based criteria) and the other has liberalised spectrum (bought via auction), then sharing is allowed only after paying market rate for the administered spectrum.

Analysts at Bank Of America Merrill Lynch said, “We do not consider the current spectrum norms to be a game changer as we do not expect any material uptake in sharing of spectrum by telcos. We consider lack of spectrum trading norms, which were widely expected with sharing norms, to be a disappointment.”

Analysts said that sharing would be possible if larger telcos like Bharti and Idea end up sharing 1,800 MHz spectrum of smaller telcos (in the administered band) to enhance 2G coverage and hence reduce call drops.

“However this would be possible only if the spectrum of larger telcos is contiguous with the spectrum of smaller telcos,” the analysts added.

Theoretically, Jio could share 800 MHz from other telcos that have liberalised 800 MHz spectrum, but only in circles where Jio has 800 MHz and where the spectrum is contiguous with other telcos.

“We remain uncertain if any of these scenarios would pan out. We do not expect to see any sharing in 900 MHz and 2,100 MHz,” the BoFA analysts added.

Edelweiss Securities Limited said that although spectrum sharing is a positive for operators, limitations of only intra-band sharing, higher Spectrum Usage Charge (SUC), and strict spectrum caps, would limit the attractiveness of spectrum sharing.

“It would be specifically beneficial for operators who have less than 5 MHz spectrum in a given band, as spectrum sharing would enable them to upgrade technology. Large-scale adoption of spectrum sharing would be negative for the telecom tower companies,” it said.

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