Until Wednesday, the telecom department had a rule saying that every telecom operator could only own effectively a quarter of all available spectrum. But now, in what comes as a relief specifically to the Vodafone–Idea combine, a 50% cap on spectrum above 1000MHz has been lifted. This effectively increases the amount of spectrum available to telcos by 40%. There is still a cap on frequencies below 1000MHz, because signal carried in those bands have better coverage, and they are classified as premium.
The rule change will also benefit Reliance Jio, which would have violated the telecom department’s cap after its acquisition of Reliance Communications’s spectrum. As for Vodafone–Idea, the combine was already in violation of the spectrum cap in five circles. Now they are no longer violating the limit.
As the telecom sector consolidates in the wake of Jio, telcos are bound to demand such concessions from rules that were designed for a market with many more operators.
According to investment banking company UBS, Jio will soon have 23.6% of available telecom spectrum, while Vodafone–Idea will have around 27.2%. Airtel has 23.5%.