Indian govt relaxes spectrum caps, extends licence payments to help ease pressure in telecom sector

Wednesday 7 March 2018 | 16:58 CET | News

The Indian government has approved measures aimed at easing business in the telecom sector, following the recent bankruptcy of two mobile operators. Longer payment deadlines and relaxed spectrum caps are expected to help the remaining operators weather the intense competition and price pressure in the market since Reliance Jio launched as a new mobile operator in late 2016. 

The cabinet approved the recommendations of an inter-ministerial group set up to look at the "stressed assets" in the telecom sector. This followed input from the sector regulator Trai last year. The measures mean operators will be able to pay for spectrum licences acquired in 2012 in up to 16 installments, rather than the current ten, spreading out the payments over a longer period.

In addition, spectrum caps were relaxed, which should allow some operators to sell licences in order to raise cash. The overall cap increases from 25 to 35 percent of available frequencies. The intra-band cap was removed and replaced with a 50 percent limit on the combined frequencies under 1 GHz (700, 800 and 900 MHz bands). Anything above 1 GHz is not subject to any individual or combined caps. The limits will be reviewed following the next World Radiocommunication Conference in 2019, when additional bands are expected to be agreed for mobile services. 

The cabinet said in a statement that the measures should increase the operators' cash flow in the near term, as well as support further consolidation and participation in upcoming spectrum auctions. 

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