Following the Cabinet’s decision to allow spectrum trading, Prime Minister Narendra Modi and senior ministers, including finance minister Arun Jaitley and urban development minister Venkaiah Naidu, have urged telecom minister Ravi Shankar Prasad to end call drops soon, sources said.
The Union Cabinet on Wednesday approved spectrum trading guidelines, which will allow operators to sell radiowaves to other service providers, a move that will also help address the problem of spectrum shortage and reduce call drops.
As a (responsible) government, call drops cannot be allowed to go on, Modi is understood to have told Prasad. According to sources, Jaitley said it would be humiliating for him and the people of this country if they have to go back to fixed-line phones.
The government allocates spectrum to telcos through auctions.
The Cabinet had last month approved spectrum sharing guidelines as well.
“The ownership right will be with the Government of India. We give right of use to operators through auction. That right of use can be traded between two service providers,” Prasad said.
Meanwhile, the Telecom Regulatory Authority of India (TRAI) has asked telcos to improve their networks and resolve the call drop problem in next 15 days. The delay in resolving the issue would not help their cause, TRAI chairman RS Sharma told operators.
With the Cabinet approving the spectrum trading norms, the government would likely take some stern measures if operators fail to reduce call drops, sources in the communications ministry said.
The guidelines will help operators to acquire new spectrum to improve quality of service and monetise their unused or under-utilised spectrum holdings,” said Prashant Singhal, global telecommunications leader, EY.
The buyer of the spectrum will have to pay 1% of the transaction amount to the government and the prescribed cap on spectrum — 25% of the total assigned in a circle and 50% in a band. This entails a 13% levy — licence fee (8%) and spectrum usage charge (5%) — for the seller.
Shares of telcos edged higher, with Reliance Communications rising 11%, MTNL gaining 5.98% and Idea Cellular up 2.12%.