India approves mobile spectrum trading

The number of mobile operators in India is set to shrink after the government allowed them to trade spectrum and even sell all their spectrum to rivals.

The move was taken with the aim to optimise the use of spectrum in a market which is short of mobile capacity. But the telecoms minister, Ravi Shankar Prasad, said that operators could sell all their spectrum in order to withdraw from the market. 

Prasad made it clear that the government will continue to own the spectrum. 

“The ownership right will be with the government of India,” he said. “We give right of use to operators through auction. That right of use can be traded between two service providers.”

The industry’s trade association gave a cautious welcome to the move. “While this is helpful to the industry and something which it has sought, issues like spectrum caps, double taxation and administrative spectrum step-up in pricing will not make it a game-changer,” said Rajan Mathews, director general of the Cellular Operators Association of India, quoted in India’s Economic Times.

Prasad said that, while the government will not restrict spectrum deals, it will need to be informed 45 days ahead of any agreement. Operators will have to pay 1% of the price to the government, and all revenue that operators make from selling spectrum will be added to the sum that is used to calculate their annual licence fee.

In August, the Indian government also approved spectrum sharing

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