Trai bars leasing of spectrum, recommends outright transfer

Telecom regulator Trai Tuesday recommended allowing outright transfer of spectrum by telecom companies to other operators, but has suggested a bar on its leasing for now.

"Under spectrum trading, only outright transfer of spectrum is permitted, ie the ownership of the usage right is transferred to the buyer. Spectrum leasing is not permitted at this point of time," Telecom Regulatory Authority of India said in its recommendations on spectrum trading.

Inter-ministerial panel Telecom Commission had in October given in-principle approval to spectrum trading and it was cleared by the Empowered Group of Ministers. Trai was then asked to provide detailed guidelines for trading.

As of now, only government is allowed to allocate spectrum to telecom firms through auctions. Once the trading is allowed, it is expected to increase efficient use of radiowaves by enabling telecom operators, who have a lower subscriber base or unutilised spectrum, to trade in it.

"The Authority analysed the draft guidelines submitted by the Steering Committee (of Trai, which included telecom firms) and has finalised recommendations on 'Working Guidelines for Spectrum Trading'," Trai secretary Sudhir Gupta said in a letter to Telecom Secretary MF Farooqui.

The regulator has recommended that only telecom operators should be allowed to trade the spectrum that has been purchased through the auction in 2010 and later. It has also allowed trading of those radiowaves for which telecom operators have paid the market rate.

Trai has suggested that telecom companies will have to trade spectrum at service area level and not a portion of it.

As per the recommendations, telecom operators holding spectrum across services 2G, 3G, 4G (BWA) and CDMA should be allowed to trade the radiowaves.

For entering in trading agreement, telecom operators will not require prior permission from government but the company will have to inform licence issuing authority, at present Department of Telecom, six week before effective date of trading spectrum.

Spectrum trading will not change its original validity period for which it has been allocated to a telecom company.

Trai has recommended a lock-in period of 2 years on spectrum that a company acquires through auction or trading before it can trade in it further.

The trading is also expected to indicate market rate of radiowaves. At present it is determined only through auctions.

As per the process, a DoT committee will now examine Trai's guidelines after which Telecom Commission will take a call on it.

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