Finally, Incumbent Operators led by Airtel, Idea and Vodafone have laid to rest the conflict of 1800MHz Spectrum with new operators and Dual technology Operators [ RCom and Tata DoCoMo]. Mr. Sudhir Gupta, Principal Adviser for Spectrum, TRAI clarified on the 1800MHz Spectrum which was bone of contention. Mr Gupta said,
Dual technology licensees (RCOM and Tata Teleservices) are not liable to pay for GSM spectrum (4.4MHz) as the original licenses were awarded in 2001. The allotment of GSM spectrum was as per the amendment of license conditions (conversion to UASL licenses) and no separate licenses were issued in 2008. The Supreme Court order quashed the ‘licenses’ awarded in 2008 and, hence, does not cover the dual-tech license holders. However, the GSM spectrum would be held by these operators till validity of their original licenses, i.e. 2021 (and not for a 20-year period till 2028).
The Government in November decided to exempt from payment of fees for 4.4MHz startup spectrum for incumbent operators thus buying peace for both the parties.
TRAI’s View on 900MHz Spectrum Refarming
Partial re-farming would most likely be the way forward with operators allowed to retain 2.5MHz of the 900MHz spectrum. Incumbent operators would have the opportunity to add up to this tally in 900Mhz auctions. The payout for 2.5MHz would be based on the market price ascertained in the 900Mhz auctions. The next round of auctions would be conducted for unsold 1800Mhz spectrum along with the 900/ 1800Mhz holding of incumbents set for renewal in November 2014. Based on current timelines, the auction is likely to be conducted before Mar’13
TRAI’s Views on 800MHz Spectrum for GSM Operations
TRAI clarified that allcation of 800Mhz frequency to GSM operators is unlikely in the near term. A total of 20Mhz is available in this band while only the upper half (10 Mhz) is suitable for GSM technology (currently used in Europe by GSM operators). In India, BSNL/ MTNL hold 2.5Mhz spectrum in the upper half and, hence, limit availability to only 7.5Mhz for GSM operators. Also, the government is yet to decide pricing of this band.
In My opinion, TRAI must not close the doors blindly and push forward the overlapping[Good for GSM and CDMA] 800MHz spectrum band for auction with pairing in appropriate 900MHz as well so that if it is efficient for Data services, Government will definitely realize higher prices.
New Telecom Policy – NTP 2012 and Mergers & Acquisition Guidelines
M&A norms, along with other NTP 2012 measures, are likely to be in place over the next 2-4 months and pave the way for consolidation in the bottom half of the market. TRAI believes the number of operators in each circle will further decline to 5-7 over the next 2-3 years and improve business dynamics for all. Merger of an existing licensee with spectrum holding at old rates with a new licensee (spectrum obtained at market prices) is feasible without any additional payment to the government assuming other M&A guidelines are adhered to.
So how do you expect Mergers & Acquisition to play out ? My favorite is Idea & Aircel merging together, which I have evaluated and need to post here. Any other combinations that fit strategically ?
Regulatory uncertainty will definitely reduce over the next few months as long as the Government is Honest & Transparent in its governance without any motive of being corrupt as evident in the 2G Spectrum Scam.