Providers of mobile voice and broadband services in India will be able to swap or sell their spectrum assets to other carriers in accordance with new trading guidelines which were approved by the national cabinet on Wednesday. By permitting carriers with low subscribership, high debt or underutilized channels to trade or sell spectrum, the new rules are expected to boost efficiency in airwave usage and the consolidation of India’s crowded wireless sector. As he acknowledged that the industry has long pressed for trading rules that would achieve “optimum utilization of spectrum,” telecom minister Ravi Shankar Prasad noted that trading will provide a more accurate indicator of the market value of spectrum which, historically, had been determined by the government through spectrum auctions.
With the exception of 800 MHz band channels sold at auction in 2013, the guidelines apply equally to all spectrum bands that have been assigned through auction since 2010 or on which licensed carriers have “already paid the prescribed market value” to the government. A carrier will be allowed to sell or trade its spectrum rights two years after it acquires affected spectrum through auctions or trades, and trades will be permitted between a maximum of two licensed providers. Spectrum trades and sales will be subject to a non-refundable fee of one percent of the transaction amount or one percent of the prescribed market price, whichever is greater, to be paid to the government. Although prior government approval of spectrum trades is not required, parties will be required to notify the government at least 45 days in advance of any proposed trade. Parties must fully comply with the terms and conditions of their respective licenses, and the government will reserve the right “to take appropriate action which . . . may include annulment of [the] trading agreement” if any party is found to be non-compliant with licensing or trading rules.