De-link licence from spectrum, go for nominal regulatory charge

In line with the recommendations of the department of telecommunications and industry committee on reviewing spectrum pricing, the Economic Survey has made a strong case for de-linking the telecom licence from the spectrum and also said spectrum trading should be allowed in the country.

The Survey has stated that licence should have a nominal regulatory charge, while the spectrum should be freely auctioned and traded among companies that have a telecom licence. It said the spectrum auction price could either be a fixed charge or a charge per unit of the bandwidth (each Mhz) which would be payable on an annual basis or the auction price could also be a combination of the two.

Currently when the Unified Access Aervice Licence is allotted to an operator, a bundled-up 4.4 Mhz 2G spectrum also comes with it. Though there is no separate charge for spectrum, the entry licence fee for a pan-India service comes for Rs 1,651 crore. The licence allows for spectrum allotment of up to 6.2 Mhz and the government has allotted spectrum to operators beyond this limit, up to 10 Mhz through an administrative order.

The spectrum review committee headed by DoT additional secretary Subodh Kumar had earlier stated that when any new licences are given out, the government must de-link the licences and the spectrum, resulting that new operators must buy even the start-up spectrum from the market. While the operators who have already been allotted licences but not been given the start-up spectrum of 4.4 Mhz or the ones possessing up to 4.4 Mhz spectrum may be allotted up to 6.2 Mhz, all future licences should be subject to this recommendation. The DoT has sought the Telecom Regulatory Authority of India's views on the matter.

Spectrum trading is currently done globally and it essentially allows operators to trade spectrum with each other.