Move will aid mergers, acquisitions

The Telecom Commission on Tuesday decided to relax the cap on spectrum holding by telcos, a move that would aid mergers and acquisitions in the sector which is reeling under financial stress.

Agreeing with regulator TRAI’s recommendations, the Telecom Commission, which is the highest decision-making body in the Telecom Ministry, approved raising the cap of overall spectrum that can be held by an operator in a circle to 35% from the current 25%.

TRAI had, in November, also recommended that the current cap of 50% on intra-band spectrum holding be removed, and instead be a cap of 50% on the combined spectrum holding in the sub-1 GHz bands (700 MHz, 800 MHz and 900 MHz bands).

“One of the issues for consideration before the Commission was the overall and intra-band cap on spectrum held by telecom service providers in the context of restructuring of stressed assets. The Commission has concurred with the TRAI recommendations,” an official said, adding that the decision would now be sent for Cabinet approval.

The decision comes at a time when the telecom industry is seeing rapid consolidation. The move, if approved by Cabinet, is likely to benefit Vodafone and Idea, which are in the middle of a merger.

Besides, Reliance Jio also recently announced that it would acquire spectrum, tower, optical fiber network and other wireless assets from Reliance Communication.

Rajan S. Mathews, DG, COAI welcomed the decision as “it will facilitate mergers and acquisitions in the sector.”

‘Network for Spectrum’

The Telecom Commission also approved increase in budget for ‘Network for Spectrum’ project, under which a dedicated communications network is being set up for defence forces in lieu of airwaves vacated for civilian use, from ₹11,330 crore to ₹24,664 crore. This decision would also be sent to Cabinet for approval.

The official added that the Telecom Commission had also approved upgradation of an earlier project to provide 2G mobile services in Andaman and Nicobar islands to 4G mobile services at a cost of ₹343 crore, as against the earlier approved ₹262 crore. Further, a proposal to provide satellite connectivity to 5,298 gram panchayats, of which about 4,240 GPs are in North East and about 800 GPs are in Jammu and Kashmir, at a cost of ₹916 crore for three years had also been approved.