Despite the Cabinet clearing the swap of airwaves between Telecom department and Defence Ministry, the government has denied to auction any more 3G Spectrum this year. It has agreed to only 5 Mhz high speed broad band bandwidth which was approved to be sold earlier. The 15 MHz, which defence has agreed to swap in return for airwaves held by the Department of Telecom, will only be available for sale after technical issues are sorted out, and this process can take at least a year.
The Cabinet, apart from approving the swap, also ratified the notification of the Defence interest zone and the Defence band, earmarking airwaves that will be used exclusively by the armed forces, as well as those that will be available for commercial sale.
Even after the swap agreement is signed, technical difficulties will prevent the spectrum from being auctioned immediately. All defence equipments are currently tuned to the networks in their possession, including the 2100 Mhz band, which will be commercially used for 3G services eventually, and would need to be re-tuned to the newly allotted frequencies.
The Telecom Regulatory Authority of India (TRAI) and the industry have called for the government to auction all the 15 Mhz of airwaves in February along with 5 Mhz of 3G spectrum already vacated by defence and being sold along with 2G airwaves and allocate it to operators at a later date, when defence actually vacates it.
Following next month's auctions, the government will announce reworked M&A guidelines, along with spectrum-sharing and trading rules, to spur much-needed consolidation in an intensely competitive industry.
Rules on mobile virtual network operators (MVNOs), which buy bulk talk time and bandwidth from an operator and then sell it to end users, along with rationalization of penalties are also priorities for the telecom department.
