According to the initial proposals by the Telecom Regulatory Authority of India (TRAI) regarding spectrum trading, the operators planning to trade spectrum will not require government permission, although they will be required to inform the authorities of such deals six weeks in advance.
Further, the operators will also be required to pay a transfer fee to the government. This fee will be based on sale value or market price of the spectrum that is traded. TRAI is considering imposition of a transfer fee of one per cent of the transactional amount or 1 per cent of the prescribed market price, whichever is higher, on all transactions regarding spectrum trading.
TRAI is of the view that spectrum assigned through an auction on or after 2010, will be allowed to be traded. The spectrum which is assigned administratively can also be traded upon payment of its market-determined value for the remaining validity of the licence.
The government has kept the spectrum-trading rules in line with other prevailing telecom policies, including rules governing auctions and the new merger and acquisition policy. It means that the acquiring telecom company cannot hold more than 50 per cent of the spectrum in a specific band and must have a wireless operating permit at the time of buying the spectrum. Further, the companies will not be permitted to sell the spectrum acquired through trading for a period of two years.
Further, the regulatory body is of the view that banks or financial institutions, which have entered into a tripartite pact with the licensor and licensee, should not be allowed to trade spectrum. However, the lender would have the rights to recover the dues by nominating a buyer to whom the spectrum usage rights would be transferred.
Earlier, the Telecom Commission had given the in-principle approval to spectrum trading, which was approved by an Empowered Group of Ministers. Subsequently, TRAI was asked to provide detailed guidelines that should be followed for spectrum trading. TRAI is now expected to come out with final recommendations regarding spectrum trading over the next few days.
