Telecom Companies allowed to share 2G spectrum on certain conditions
The Telecom Commission has made a decision to allow mobile phone companies to share spectrum, but has limited this facility to 2G airwaves alone as the 2G spectrum is largely used for offering voice services across the country.
For this the Telecom Commission has introduced some rules to govern spectrum sharing. First, only those operators that have airwaves in a particular region can share it. Suppose Uninor or Tata Teleservices which does not have 2G spectrums in Delhi, cannot share airwaves with any other operator that has radio frequencies here and launch GSM-based cellular services.
Two companies can share airwaves only if their combined holdings do not exceed the limits prescribed in the M&A norms. The TC had recently approved TRAI’s recommendation that during mergers, the combined entity be allowed to have up to 25% of the total airwaves in the region. Spectrum sharing deals will also have to be renewed every five years.
When operators share spectrum, both companies will have to pay usage charges on the total airwaves held jointly. Currently, operators share between 2% and 6% of their annual revenues based on the quantity of airwaves they hold. For instance, an operator that has only 4.4 MHz of airwaves in a circle shares 2% of its annual revenues towards spectrum usage charge. Now, if two companies that have 4.4 MHz each of 2G airwaves in a region were to share them, both operators will have to share 6% of their annual sales towards this levy.
The TC also said that telcos sharing spectrum must pay the government the commercial value of the airwaves it is using. This means, an operator that has 4.4 MHz of airwaves, and is sharing radio frequencies with another telco that has the same amount, must pay ‘current prices’ for additional 4.4 units of spectrum it is using.