The Union Cabinet on Wednesday approved much awaited >spectrum trading guidelines that will allow telecom companies to buy and sell spectrum. This is expected to help address the problem of shortage of spectrum, leading to better quality of services for mobile phone users.
The decision comes close on heels of the government allowing companies to >share airwaves in the same band so as to reduce call drops. Presently, spectrum can be acquired by companies only through government auctions. Industry has been demanding clarity on these guidelines for a long time.
“Cabinet has approved spectrum trading norms. This allows better spectrum usage as the idle spectrum with one service provider gets transferred to the other service provider who is facing spectrum crunch,” Telecom Minister Ravi Shankar Prasad said.
He clarified that the ownership of the spectrum will remain with the Government of India. “We give ‘right of use’ to operators through auction. That right of use can be traded between two service providers,” the minister said.
Reacting to the news, >shares of telecom firms edged upwards, led by Reliance Communications that settled with gains of 11.57 per cent on the BSE. While MTNL scrips closed at 5.98 per cent higher, Idea Cellular went up by 2.12 per cent and Bharti Airtel by 2.44 per cent.
“Spectrum trading would provide exit opportunity to operators who have not been able to build scale in India and have been facing unprofitable operations by selling off their spectrum. It would provide bigger players who have congested networks to buy new spectrum and improve the quality of service for customers. They do not have to wait for the spectrum auction to get additional spectrum,” Deloitte Haskins & Sells LLP Partner Hemant Joshi said.
These guidelines will also aid in consolidating the industry.
Mr. Prasad said the companies entering into trade agreements are not need to seek approval but have to only inform the government. However, the firms are required to give an undertaking that all rules and regulations are complied with.
Offshore wind energy In a separate decision, the union Cabinet also gave its nod to the policy for offshore wind energy. The approval paves the way for offshore wind energy development, including setting up of offshore wind power projects and research and development activities.
“Under the policy, there will be energy mapping of the country and locations with high potential will be identified,” Power, Coal and New & Renewable Energy Minister Piyush Goyal said at a press conference.
He added, “We have assessed the capacity of offshore wind power. There is a potential of generating 1,06,000 MW power through offshore wind source on Gujarat's coastline alone and (it is)… 60,000 MW on Tamil Nadu's coastline.”
