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Telecom Commission approves relaxing spectrum holding limits

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(G.N.S) Dt. 09
New Delhi
The telecom commission (TC) has approved relaxing spectrum holding limits, a move that would aid mergers and acquisitions as well as spectrum sale in a market where small carriers are trying to sell assets, including airwaves, to repay debt.
The Telecom Commission, the highest decision-making body in the communications ministry, Tuesday agreed with the Telecom Regulatory Authority of India’s (Trai) suggestions, removing the 50% cap on intra-band spectrum holdings of carriers post mergers, but putting a 50% limit on the combined spectrum holding in the 700 MHz, 800 MHz and 900 MHz bands. Trai had also suggested increasing the overall holding limit to 35% from 25%. Current government rules bar any merged entity from holding more than 25% of the spectrum allocated in a service area or circle, and over 50% of a band. The decision of TC would now go to the union Cabinet for approval, a senior government official said.
“We welcome the decision of the Telecom Commission to increase the overall Spectrum Cap, as it will facilitate Mergers and Acquisitions in the sector,” said Rajan S. Mathews, director general, Cellular Operators Association of India (COAI), an industry body which represents all major operating phone companies.
These would immediately benefit Vodafone India and Idea Cellular BSE -0.82 %, which are in the process of merging their operations. Post-merger, the combined entity would be able to retain all the airwaves owned individually by the two companies.
Such a move would also offer an opportunity to Reliance Jio Infocomm to mop up more airwaves in the 850 MHz band from Reliance CommunicationsBSE -3.39 %, which is selling its bandwidth to raise funds and pare debt. RCom, which got 30 Mhz of 4G-ready airwaves from its merger with Sistema Shyam Teleservices, has recently announced sale of over 122 Mhz of airwaves to Jio. The Anil Ambani owned telcos also has roughly 130 Mhz more airwaves – 70 Mhz of which are in the 850 Mhz airwaves – which it also wants to dispose of.

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