TRAI Mulls New 2G, M&A Rules
In the past, the allocation of 2G spectrum has been linked to subscriber numbers, with extra capacity issued when customer number thresholds were reached.
Now, though, it wants the country's GSM operators to pay for any capacity they have beyond a certain limit -- 10MHz in New Delhi and Mumbai, 8MHz in markets with populations greater than 1 million, and 6.2 MHz elsewhere -- with the price to be based on the amount carriers will pay for 3G spectrum, the auction for which is still ongoing. (See Fears Over 3G Fee Fairness.)
The recommendation includes a suggestion that those operators already holding spectrum beyond these limits should also have to pay a one-time fee, an idea that's likely to cause an uproar among India's largest players. For the CDMA players, the capacity beyond which operators will have to pay is 8MHz in the metropolitan markets and 5MHz elsewhere.
Check out this Business Standard article for more background.
The operators are desperate for new spectrum, as subscriber numbers have been rising dramatically (about 20 million new lines activated each month) but no extra spectrum has been handed out since May 2009. (See India Watch: Vendor Lockdown and India Passes 500M Mobile Mark.)
The TRAI also recommended today that current restrictions on companies selling their stakes in startup mobile operators should be lifted, a move that would provide a catalyst for potential mergers and acquisitions. See this Reuters article for more.
— Gagandeep Kaur, India Editor, Light Reading