TRAI recommendations on licensing policy and spectrum
The Telecom Regulatory Authority of India (TRAI) has recommended certain measures in the licensing policy ranging from issues like the entry limit and spectrum allocation, merger & acquisition (M&A) guidelines, usage of technologies and rollout obligations.
The recent policy initiatives are favourable for Reliance Communication as it sets the framework for its proposed rollout of services under the GSM technology. On the other hand, the large GSM operators would be adversely impacted due to the enhanced subscriber criteria for additional spectrum (as it would result in higher capital expenditure [capex] requirement) and increased cost of services (due to the increase in the annual usage charges and the levy of one-time charge on additional spectrum). However, it should be noted that these are only recommendations and have not been notified by the concerned government department yet. We expect the GSM operators to strongly oppose some of the recommendations.
The key recommendations and its implications are given below.
# Spectrum allocation and entry of new operators
- There will be no cap on the number of access service providers in any service area.
- In order to frame a new spectrum allocation criteria, a multidisciplinary committee may be formed. But as an interim measure the present subscriber norms have been enhanced significantly.
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