The Department of Telecommunications (DoT) has approached the sector regulator the Telecom Regulatory Authority of India (TRAI) on review of existing spectrum caps - 50 percent within a band and 25 percent overall across all bands - applicable on the operators. The telecom department’s letter to TRAI in this regard follows the recommendations made by the inter-ministerial group (IMG) tasked with examining financial stress in the telecom sector.
In light of the IMG report, TRAI is requested to provide views on whether existing applicable band-wise spectrum cap of 50 percent of total spectrum assigned in a band for an LSA (Licensed Service Area) and overall cap of 25 percent of total spectrum assigned in LSA across bands, should continue or needs review. IMG, in its report, had stated that Idea, Vodafone and Reliance Communications had requested for removing the spectrum caps, while Airtel had represented against it. It also noted that the matter 'merits examination and inputs from regulator' and accordingly, the telecom department has decided to consult TRAI on the issue of spectrum limit.
As per the current rules, operators in each access area are not allowed to exceed the cap of 25 percent of total radiowaves assigned in 700, 800, 900, 1800, 2100, 2300 and 2500 Mhz bands, and 50 percent within a specific band. In case of a merger and acquisition, if merged entity exceeds the stipulated limits it has to surrender the excess spectrum within one year. Any easing of spectrum limit within a band by TRAI may come as a relief to Idea Cellular and Vodafone which are in the process of merging.