NEW DELHI: The Ambani brothers appear to have scored an early victory over their GSM rivals such as Airtel and Vodafone after the government decided that telcos can share and trade their spectrum after paying the latest auction winning prices to the government.

This means that the March 2015 auction winning prices would be considered as the market determined price for the 800MHz band, historically used for CDMA services.

Reliance Jio Infocomm and Reliance Communications (RCom), owned by Mukesh and Anil Ambani, respectively, were involved in a letter war with GSM operators, who use spectrum in the 1800MHz band, over what should be considered market determined price for CDMA airwaves.

The government had raised nearly Rs 17,000 crore by selling over 77MHz of spectrum in the 800MHz band. GSM telcos, represented by their industry body COAI, had argued that in 12 circles where less than 5MHz of 800MHz was sold in March 2015 not enough to offer 4G services the auction winning price didn't reflect the market price as the smaller quantity had led to poor demand. By their logic, the market price should be higher.

If accepted, this could have effectively increased the amount that RCom would have needed to pay to the government to execute its proposed plan to liberalize its non-auctioned CDMA airwaves and share them with Jio to offer 4G services.

The telecom department (DoT) on Thursday notified the guidelines on liberalizing spectrum in both 800MHz and the 1800MHz, paving the way for almost all telcos including Bharti Airtel, Vodafone India, Idea Cellular, Aircel, Tata Teleservices and RCom to share or trade their airwaves after liberalizing their non-auctioned spectrum.

Only RCom and Tata Tele hold airwaves in the 800MHz band, while the rest hold 1800MHz bandwidth.

Under the DoT guidelines, administratively-allotted spectrum can be liberalized for the remaining period of their licence. A carrier will have to pay auction determined price prorated for the balance validity period.

"In case more than one set of auction determined prices are available, the latest auction determined prices for the respective frequency band as available at the time of calculation of charges/amount payable for liberalization of spectrum, would be applied," the DoT said.

Thus, for both 800MHz and 1800MHz band -- both of which can be used for 4G services the market-determined price will be the winning price at the March 2015 auctions.

The guidelines state that administratively-allotted spectrum in the 800MHz band and the 1800MHz band refers to the spectrum allotted prior to auctions in November 2012, for Rs 1,658 crore. This amount will be adjusted against the total payment for liberalizing spectrum.

DoT said an operator will have to put in a written request detailing the band and the service area where it would like to liberalize its airwaves, accompanied by a non-refundable processing fee of Rs 50,000 per service area. The airwaves will be liberalized for the balance period of validity and the amount payable will also be calculated on a pro-rata basis for the balance tenure of the permit.

If the auction determined price of the spectrum is more than a year old, then the prevailing market rates will be fixed indexing the last auction price at the rate of SBI PLR.

To liberalize their spectrum, telcos would require to submit bank guarantee equal to one-time spectrum charges (OTSC) amount demanded by government till the matter is finally decided by the courts, the guidelines said.

DoT had earlier raised demand of OTSC on incumbent telcos, cumulatively amounting to over Rs 31,000 crore for those interested in liberalizing the radio waves held by them. Telecom operators have challenged the demand in various courts and the matter is still sub-judice.