TRAI released Working Guidelines for Spectrum Trading

Telecom Regulatory Authority of India (TRAI) released working guidelines for trade of spectrum on 28 January 2014. The guidelines need to be approved by the government before it can be implemented.

Main Working Guideliens are:

•    Only outright transfers of airwaves have been permitted from the seller to the buyer.
•    While no permission will be required from the government for trading of spectrum, the regulator has mandated that both the seller and the buyer will have to inform the licensor six weeks before the trade takes place.
•    Only that spectrum will be allowed to put up for trade for which the companies have paid a market determined price, and trade of spectrum will be on a pan-licensed service area basis.
•    While the transaction will be between two parties–buyer and seller—the regulator has provided that the seller has the flexibility to choose the prospective buyer of its spectrum through mechanism such as tender or auction.
•    In 800 Mhz, spectrum trading will be allowed in the block size of 1.25 Mhz, in 900 Mhz and 1,800 Mhz at 200 Khz, in 2,100 Mhz at 5 Mhz, in 2,300 Mhz and 2,500 Mhz at 20 Mhz.
•    A non-refundable transfer fee of 1% of the transactional amount or 1% of the prescribed market price, whichever is higher shall be imposed on all spectrum trade transactions.

These working guidelines once implemented, trading will enable companies to sell their surplus radio waves to operators facing a spectrum crunch. Spectrum trading is also expected to boost mergers and acquisitions in the sector.

About TRAI

The Telecom Regulatory Authority of India (TRAI) was established on 20th February 1997 by an Act of Parliament, called the Telecom Regulatory Authority of India Act, 1997.

It was established to regulate telecom services, including fixation/revision of tariffs for telecom services which were earlier vested in the Central Government.