DoT says there's no question of allowing spectrum trading

New Delhi: Perhaps wiser after the 2G scam, the government will not allow spectrum trading just yet despite it being a specific proposal in the National Telecom Policy of 2012.

Speaking to Firstpost, Telecom Secretary R Chandrasekhar said that the Indian market was not mature enough for spectrum trading to be allowed. “We will allow sharing of spectrum but not trading immediately. A number of issues arise in trading of spectrum, a commodity which is today controlled by the government. Trading would mean it becomes like property - can be bought and sold, can be bought for short periods, etc. It may or may not have security implications but other issues remain”.

The secretary said that the draft NTP 2012 has already been circulated among various ministries and DoT is expecting a clearance by the Union Cabinet sometime this month.

He also made it clear that a revenue-sharing model for spectrum allocation was not an option before DoT. Many telecom experts have suggested that instead of asking teclos to pay upfront fees for spectrum, they should be asked to enter a revenue-sharing model with the government.

Chandrasekhar said that though revenue share is a good way of opening up a market, the dynamics of the Indian market have changed now. “This worked when India was not such a populous market. Also, we have seen earlier that when there was no charge for holding spectrum, people held it without using it. Spectrum is a much more scarce thing and must not be held without charge”.

He said this was the reason the government was following a partial revenue share model- it had based licence fees and spectrum usage charges on the licensee’s revenues whereas upfront payment is needed for spectrum acquisition.

The Telecom Regulatory Authority of India (Trai) is to get back by 13 May on several queries that DoT has raised over the former’s spectrum auction recommendations. According to the draft Cabinet Note prepared by DoT, NTP 2012 provides for making spectrum technology and service neutral (something that Trai has already proposed in the upcoming auctions). It also provides for spectrum pooling, sharing and trading “to enable optimal use of spectrum through an appropriate regulatory framework”.

The new policy will also allow telephone users free national roaming and number portability besides also pushing for much more rural penetration of telephony. But telecom companies seeking fresh licences need not wait for the NTP 2012 to come in force as they can get it after guidelines for unified licences are finalised by DoT. The government has proposed to introduce a new ‘Unified Licences’ regime and provide a migration mechanism for existing telecom licensees.