Current regime
Proposed changes
Comment
The availability of bandwidth is vital for the operation of telecommunications services. However, the electromagnetic spectrum can be divided only a finite number of times, making it a scarce natural resource. Over the past decade, the number and range of wireless applications have considerably increased, spreading to most areas of economic and social activity. As a result, with no restriction on the number of licensed telecommunications operators in India, there has been an unprecedented growth in wireless subscribers. The demand for allocated bandwidth has therefore multiplied, with some licensed telecommunications operators not being provided with the bandwidth they need in order to roll out their telecommunications services.
At present, spectrum sharing is not permitted in India, as indicated by the response of the Department of Telecommunications in February 2010 during its auction of third-generation (3G) and broadband wireless access:
"At present, spectrum trading and sharing are not permitted. However, it may be noted that [the Telecommunications Regulatory Authority of India (TRAI)] is currently carrying out a consultation process on these and related issues, which may or may not lead to a change of related policy in the future."
Under the Guidelines on Infrastructure Sharing formulated by the Department of Telecommunications in 2008, sharing of active infrastructure among telecommunications providers is permitted, provided that they enter into mutual agreements. However, the guidelines provide that such sharing is limited to antennae, feeder cables, node B, radio access networks and transmission systems only. As such, the guidelines categorically stipulate that sharing of allocated spectrum is not permitted.
Spectrum management is therefore considered a critical issue in deciding the future of telecommunications in the country.
Recommendations of the TRAI
In its May 11 2010 recommendations (on spectrum management and licensing frameworks), the TRAI suggested that, among other things, the following guidelines be adopted for spectrum sharing:
- Spectrum sharing should be permitted, but in each case it should be within the same licence service area and with the prior permission of the licensor, strictly in accordance with the guidelines being laid out.
- Permission for spectrum sharing should be given for a maximum period of five years, with no renewal.
- Spectrum sharing should be allowed only between parties that each have no more than 4.4 megahertz (MHz) (on Global System for Mobile Communications networks) or 2.5 MHz (on Code Division Multiple Access networks) of the spectrum.
- Sharing should be allowed only if there are at least six operators in the licence service area after the sharing arrangement has been agreed.
- Spectrum sharing should not be permitted among licensees for the 3G spectrum.
- Spectrum sharing should involve both service providers using the spectrum (ie, leasing of a portion of the spectrum is not permitted).
- Spectrum could be shared only between two spectrum holders - that is, a non-licensee or licensee that has not, as yet, been assigned access to a spectrum, could not be a party to spectrum sharing.
The aforementioned recommendations have not yet been implemented by the Department of Telecommunications and hence are non-binding and do not have the force of law. The functioning of the TRAI is governed by the TRAI Act 1997. Under the act, the TRAI does not have the power to amend the terms and conditions of licences or registrations issued by the department. Further, the recommendations of the TRAI are considered non-binding until they have been accepted by the central government and notified in the form of an appropriate applicable law.
Proposed National Telecommunications Policy 2011
Discussions and news reports have suggested that, in the proposed National Telecommunications Policy 2011, the Department of Telecommunications may permit spectrum sharing by two or more licensed telecommunications operators. However, no draft of the policy has yet been released.
Since the spectrum availability is scarce, it is expected that spectrum sharing, when permitted, will lead to optimum utilisation of this resource and, in turn, will enable licensed telecommunications operators to expand their services and maintain quality of service in India.
For further information on this topic please contact Kanchan Sinha or Megha Bhargava at Amarchand & Mangaldas & Suresh A Shroff & Co by telephone (+91 11 2692 0500), fax (+91 11 2692 4900) or email ([email protected] or [email protected]).