Ministry terms for spectrum sharing

Connecting call

New Delhi, June 12: The finance ministry may push the Telecom Commission to accept the sharing of spectrum provided the company farming out the scarce resource pays a percentage of the revenue it earns from such a deal to the government.

According to officials, with the Telecom Disputes Settlement & Appellate Tribunal allowing roaming pacts, stalling spectrum sharing did not make sense, unless the government decided to challenge roaming before the Supreme Court.

They said the alternative was to foster a healthy market for sharing unused spectrum with a fee that would add to the coffers of the government.

The government is likely to agree to spectrum sharing within the same circle, officials said. However, this will depend on inter-ministrial consultations.

The government will also have to decide on the spectrum usage charge and how they will be levied on a company taking extra spectrum within a circle.

At present, the formula to calculate the charge is based on slabs, with the charge varing from 3-8 per cent of revenue, depending on how spectrum is being used. This means when an operator buys or rents fresh spectrum, it moves to a higher slab. Analysts maintain that the implementation of this rule will lead to the clubbing of total spectrum being shared by two operators to calculate the fee.

“For example, if telco A has 7 MHz of spectrum and B has 4.4 and A rented out 2 MHz to B, both will pay a proportionate but higher charge calculated on the total, that is 11.4 MHz,” independent telecom sector analyst Sudipto Bose said.

Telecom regulator Trai had called the differential spectrum usage charge “a disincentive for any merger or acquisition, spectrum sharing and trading as well as in acquiring any additional spectrum”.

Idea QIP

Idea Cellular today said it had raised Rs 3,000 crore through qualified institutional placement (QIP) which witnessed strong interest from both foreign and domestic investors.

The company will raise Rs 750 crore through private placement of 5.18 crore shares to its Malaysia-based existing shareholder Axiata.