Cabinet clears spectrum trading guidelines


New Delhi, Sept 9: The Cabinet on Wednesday has approved guidelines on telecom spectrum trading, arising from the recommendations of the Telecom Regulatory Authority of India (TRAI). Together with the earlier decision, this is expected to transform the spectrum usage in the telecom sector.
“Cabinet has approved spectrum trading. Telecom sector has been demanding it for optimum utilisation of spectrum,” Ravi Shankar Prasad, Communications and IT Minister said.
Some of the salient features of the trading guidelines include allowing two access service providers only transfer of right to use the spectrum from the seller to the buyer.
Spectrum trading will not alter the original validity period of spectrum assignment as applicable to the traded block of spectrum. As of now only Government is allowed to allocate spectrum to telecom firms through auctions. As per the guidelines, a licensee will not be allowed to trade in spectrum if it has been established that the licensee had breached the terms and conditions of the licence and the licensor has ordered for revocation/ termination of its licence. It also says seller shall clear all its dues prior to entering into any agreement for spectrum trading. Thereafter, any dues recoverable up to the effective date of transfer shall be the liability of the buyer.
In such as scenario, the Government is entitled to recover the amount, if any, found recoverable subsequent to the effective date of the transfer, which was not known to the parties at the time of the effective date of transfer, from the buyer or seller, jointly or severally. It also says spectrum trading shall be permitted only on a pan-licensed service area (LSA) basis.
The decision by the Cabinet has been lauded by the telecom companies and analysts, and said it will help the industry to grow and they do not have to wait for auction to get additional spectrum.