The Telecom Commission on Tuesday accepted recommendations by the industry regulator to ease current spectrum holding caps smoothening the way for consolidation triggered by Reliance Jio Infocomm Ltd’s September 2016 launch. The commission the highest decision-making body at the department of telecommunications approved raising the overall spectrum cap per operator in a telecom circle or zone to 35% from the current limit of 25%.
The TC considered 5-6 issues regarding the overall intraband caps for TSPs in the context of the restructuring of stressed assets. And it has concurred with TRAI’s recommendations which basically recommended increasing the overall cap from 25 percent to 35 percent and having a cap of 50 percent on the sub-1 GHz category 700MHz, 800MHz, and 900MHz. This will now go for Cabinet approval a senior government official.
The TC had earlier approved the IMG recommendations on the spectrum payment tenure and the interest rate shift. Now with the approval of the spectrum cap matter too, the issues will be sent to the Cabinet for approval. Cellular Operators Association of India Director General Rajan Mathews. We welcome the decision of the TC to increase the overall spectrum cap as it will facilitate mergers and acquisitions in the sector.
Reliance Jio too could benefit as it will be able to mop up more airwaves in the 4G-ready 850 MHz band. Jio holds the maximum amount of airwaves in the 850 MHz band across all 22 circles and the increased caps will give it the leeway to acquire more spectrum from Reliance Communications which still has 70 MHz of the bandwidth. The main gainer will be Jio which will be on a spectrum hunt and has the muscle to back itself.
With the kind of data consumption that we have seen operators would need additional spectrum but we do not see a spectrum auction happening in the next 9-12 months as the companies are still optimizing spectrum portfolio. We would want to see the consumption of data after penetrating into deeper pockets of India. Spectrum need will come after more and more people come to 4G as they will consume data and they would need higher speed.