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The Telecom Regulatory Authority of India (TRAI) on Tuesday finalised its response to the report on ‘Issues Relating to Spectrum Cap’, increasing it to 35 per cent from the current limit of 25 per cent.
In its recommendations to the Department of Telecommunications, the telecom regulator also said the current intra-band cap should be removed.
Instead, there should be a cap of 50 per cent on the combined spectrum holding in the sub-lGHz bands (700 MHz, 800 MHz and 900 MHz bands).
TRAI had sought comments from telecom service providers (TSPs) and inter alia took notes that the overall spectrum cap of 25 per cent was imposed at a time when there were 6-10 TSPs in a licensed service area (LSA). After the ongoing consolidation in the sector, the number of TSPs in an LSA may be far lower.
“The spectrum being assigned through auction is a liberalised spectrum. At present, more than 80 per cent of the spectrum held by various service providers is liberalised spectrum, wherein they can use any technology of their choice in any band or using multiple bands,” TRAI said.
It said that as the LTE (long-term evolution) frequency device ecosystem is evolving in each of the spectrum bands, there is no real need to put a spectrum cap in each band.
“In fact, asking a TSP to acquire spectrum in a different band to deploy the same technology, increases the cost of network with no real gains,” the regulator said.
TRAI also explained that “sub-1 GHz bands are perceived as the most optimal bands to ensure availability of wireless broadband services over large areas with a low population density.
“Therefore, spectrum in the sub-l GHz range should be treated separately, and special provisions have to be made to safeguard against creation of a monopoly.”
The government had recently constituted an inter-ministerial group (IMG) to look at ‘Stress in Balance Sheet in Select Sectors’.
The IMG, among other things, reviewed the spectrum cap applicable for TSPs, and in its report, stated the issue requires detailed examination and inputs from sectoral regulators.
In light of the IMG report, the Department of Telecommunications, through its letter dated September 29, had requested TRAI to provide its views on the spectrum cap.
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