The Hindu Business Line : Telecom authority for cap on mobile operators

New Delhi June 12 The Telecom Regulatory Authority of India (TRAI) on Tuesday kickstarted the process for facilitating the next wave of telecom reforms by floating a consultation paper that discusses a number of key policy decisions including capping the number of mobile operators in each circle.

TRAI said that unrestricted entry of access providers would put pressure on spectrum demand; therefore, a discussion was needed on whether to limit the number of players or allow market forces to decide. At present, there are up to eight mobile operators in a circle.

"In view of the fact that spectrum is a scarce resource and to ensure that adequate quantity of spectrum is available to the existing licensees for expansion of services and delivery of the quality of service, it points towards a possible inference for establishing some kind of a benchmark/limits on the number of access service providers in each service area. On the other hand, the advocates of unchained market forces would argue for no priori determination of number of access providers in any service area," it said in the consultation paper. TRAI has also raised the issue of allowing mobile operators to use a mix of technology. The regulator has sought comments from the stakeholders on how the spectrum should be allocated in case it is decided that an operator can offer both GSM and CDMA-based services under the same licence. Reliance Communication, a CDMA operator, had earlier sought GSM spectrum and TRAI's recommendations will be crucial for the company's future rollout plans.

The paper also discusses various issues relating the existing mergers and acquisitions guidelines including bringing about a change in the spectrum cap of 15 Mhz per operator.

The regulator said that most operators already have enough subscribers which require more than 15 Mhz spectrum and, therefore, there should be a review of the cap. The paper also sought views on whether the definition of dominant market position should be changed from the existing 67 per cent market share in the event any two companies merge. The regulator sought to review the clause that prohibits a company from holding more than 10 per cent stake in two different companies in the same circle.

It proposed to encourage operators to roll out services in rural areas by providing incentives rather than enforcing obligations. "There is a need to adopt a fresh approach on the imposition of 5 per cent of the annual revenues towards the USO Fund."

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