Dampening the hopes of the telecom industry, the auction for spectrum sharing will be delayed that was about to happen in February. One block (5MHz) of 3G spectrum against four blocks suggested by telecom regulator TRAI was scheduled to take place the following month. The delay is said to be due to certain issues that still require further consideration and thus it may be sent back to TRAI.
A permission to share and trade spectrum -- recommended by TRAI but pending an approval from Department of Telecom (DoT) -- will come as a relief for the telecom industry. Spectrum is a scarce and an expensive commodity and companies straddled with heavy debt and spare spectrum can share or trade it with operators, who need the coveted airwaves to manage growing subscriber and data base.
Operators like Bharti Airtel, Vodafone and Idea Cellular need enhanced spectrum holdings to manage their stretched and congested networks. Some of the smaller players, who have not been growing so fast and need funds to manage business, can share and trade their spare spectrum holdings to raise funds, if it is allowed.
Spectrum sharing and trading also has the potential to spur consolidation in the telecom sector, which has around a dozen players. Merger and acquisitions in the sector have not happened as most of the potential targets carry heavy debt on their books, discouraging most of the bigger players.
A delay in announcing the norms will disappoint the industry, which has been waiting for a long time. Operators say announcement of the norms will help them plan their spectrum bids accordingly. If we can get access to spectrum through this method, some of the operators will refrain from showing unnecessary exuberance in the spectrum auctions. It will be healthy for the industry and avoid unnecessary bidding and high debts.
