The Telecom Regulatory Authority of India (TRAI) has released (pdf) its final recommendations on the much-awaited spectrum sharing guidelines which allows telcos to share spectrum.

This is expected to help telcos increase their spectrum without participating in auctions and enable debt-ridden telcos to monetize their spectrum to reduce debt. This could also possibly result in improved service quality and lower tariffs from telcos.

TRAI mentions that these recommendations were formulated after analyzing the draft guidelines submitted by the Steering committee which comprised of senior TRAI officers and representatives from all telcos. Earlier in January, TRAI had also released its final recommendations on spectrum trading guidelines, which allows telcos to buy or sell spectrum.

TelecomTRAI Recommendations

– Spectrum sharing will be restricted to sharing by only two licensees provided there will be at least two independent networks in the same band. Leasing of spectrum is still not permitted.

– Spectrum from all categories should be sharable provided that both the licensees are having spectrum in the same band. This includes spectrum in bands of 800/900/1800/2100/ 2300/2500 MHz.

This essentially means that licensees can share their 2G, 3G or 4G spectrum provided both of them have spectrum in the same band. If only one of them has spectrum in a specific band (eg 900 MHz), they cannot share spectrum in that band. Remember that spectrum sharing was previously barred in 3G spectrum, while it was allowed in 2G spectrum.

It’s worth noting that this recommendation is quite opposite to the recent TDSAT ruling which had allowed telcos to share spectrum irrespective of the spectrum band. This had enabled telcos to offer 3G services in the circles where they do not have spectrum. TDSAT had mentioned that these agreements do not violate any conditions mentioned in the Unified Access Service Licence (UASL) license and are therefore valid.

– Both the licensees can offer services using all technologies (like GSM, CDMA, WCDMA and LTE among others) they can independently provide through their own spectrum holding, if they are sharing spectrum in a band in which they only have spectrum which is either acquired through an auction in 2010 or later or the licensee has already paid the market value to the government.

– Both licensees willing to share spectrum should inform the licensor (DoT) at the time of entering the spectrum sharing agreement. No permission will be required from the government for this purpose, however it will have the right to annul the agreement, if the agreement is found to be flouting the guidelines.

It should also jointly provide a prior intimation to DoT’s Wireless Planning and Coordination Wing (WPC) 45 days before the effective date. WPC will have two weeks to raise any objections and telcos will have a similar time limit to respond to these objections. WPC will have another two weeks to take a final decision and communicate it to the telcos. If WPC doesn’t communicate within this period, the sharing agreement is assumed to have become operational.

Spectrum usage charges: Licensees sharing the spectrum will be deemed to be sharing their entire spectrum in a particular band in the service area for the purpose of charging spectrum usage charges. TRAI says this because it is not possible to monitor the quantum of spectrum being shared at each site and segregate the AGR (adjusted gross revenues) on a site-wise/area-wise basis. However, this way, the government ends up making double the money and also make it unviable for telcos.

TRAI recommends that post sharing, the Spectrum Usage Charges (SUC) of each licensee should also increase by 0.5% of AGR. For instance, if the telco is paying a 6% SUC for spectrum in 1800MHz band, it would have to pay 6.5% SUC post spectrum sharing.

– A licensee will not be eligible to share their spectrum if it has been established that the telco is in breach of terms and conditions of the license and DoT has ordered the revocation or termination of license.

– Both licensees should ensure they fulfill the specified roll-out obligations and specified QoS norms. This will ensure there is no spectrum hoarding for trading/sharing.

– A non-refundable processing fee of Rs 50,000 should be paid by each licensee for each service area to WPC for sharing spectrum. This should be paid at the time of intimation to WPC.

Spectrum Caps: TRAI recommends that 50% of the spectrum held by the other licensee in the band being shared should be counted as additional spectrum being held by the licensee, in order to comply with spectrum caps of 50% in a band and 25% of total spectrum assigned.

– Both licensees will be individually and collectively responsible for complying with sharing guidelines which includes interference norms. In case of any interface due to spectrum sharing, both have to give an undertaking that they will resolve it within 30 days failing which they will stop sharing spectrum until the issue is resolved.