Guidelines for Trading of Access Spectrum by Access Service Providers
Guidelines for Trading of Access Spectrum by Access
Service Providers
The National Telecom Policy envisage to move at the
earliest towards liberalisation of spectrum to enable use of spectrum in any
band to provide any service in any technology as well as to permit spectrum
pooling, sharing and later, trading to enable optimal utilisation of spectrum
through appropriate regulatory framework.
The spectrum trading leads to greater competition
provides incentives for innovation, better/new services being available to
consumers at cheaper tariffs, better choice to consumer, etc. This also
facilitates ease of doing business in India by allowing free play in the
commercial decisions and leads to optimisation of resources apart from
improving the spectral efficiency and quality of service.
After considering the recommendations of TRAI on spectrum
trading, the Government has now decided to allow trading of access spectrum as
per guidelines given below:
(1). Spectrum
trading shall be allowed only between two access service providers, holding
Cellular Mobile Telephone Service (CMTS) License, Unified Access Service
License (UASL), Unified License (Access Services)(UL(AS)) and Unified License
(UL) with authorization of Access Service in a licensed service area.
(2). All
access spectrum bands earmarked for Access Services by the Licensor will be
treated as tradable spectrum bands.
(3). The
Access Service Provider who is transferring the right to use the spectrum is
hereinafter referred as “Seller” while the Access Service Provider who is
acquiring the right to use spectrum is hereinafter referred as “Buyer”.
(4). Only
outright transfer of right to use the spectrum from the seller to the buyer
shall be permitted. Leasing of spectrum is not permitted.
(5). Spectrum
Trading shall be permitted only on a pan-LSA (Licensed Service Area) basis. In
case the spectrum assigned to the seller is restricted to part of the LSA by
the Licensor, then, after trading, the rights and obligations of the seller for
the remaining part of the LSA with regard to assignment of that spectrum shall
also stand transferred to the buyer. Further, relevant provisions of NIA with
respect to spectrum assignment in part of the LSA, which were applicable to
seller before the spectrum trade, will apply to buyer subsequent to the
spectrum trade.
(6). Spectrum
trading shall be permitted only in the following block sizes (band wise):
Spectrum band
|
Block Size
|
800 MHz
|
2x1.25 MHz
|
900 MHz
|
2x200 KHz
|
1800 MHz
|
2x200 KHz
|
2100 MHz
|
2x5 MHz
|
2300 MHz
|
20 MHz in TDD
|
2500 MHz
|
20 MHz in TDD and 2x10 in
FDD
|
(7). Spectrum
trading will not alter the original validity period of spectrum assignment as
applicable to the traded block of spectrum.
(8). Only
that spectrum, as specified in para 6 above, is permissible to be traded which
has either been assigned through an auction in the year 2010 or afterwards, or
on which the Telecom Service Provider (TSP) has already paid the prescribed
market price as per para 24 below. In such a case, entire spectrum would be
tradable. In respect of spectrum in 800 MHz acquired in the auction held in
March 2013, trading of spectrum shall be permitted only if the differential of
the latest auction price and the March 2013 auction price on pro-rata basis on
the balance period of right to use the spectrum is paid
(9). Both
the licensees trading the spectrum shall jointly give a prior intimation for
trading the right to use the spectrum at least 45 days before the proposed
effective date of the trading as per prescribed format to Wireless Adviser,
Wireless Planning and Coordination Wing, Department of Telecommunications, 6th floor,
Sanchar Bhawan, 20, Ashok Road, New Delhi – 110001.
(10). Both
the licensees shall also give an undertaking that they are in compliance with
all the terms and conditions of the guidelines for spectrum trading and the
license conditions and will agree that in the event, it is established at any
stage in future that either of the licensee was not in conformance with the
terms and conditions of the guidelines for spectrum trading or/and of the
license at the time of giving intimation for trading of right to use the
spectrum, the Government will have the right to take appropriate action which
inter-alia may include annulment of trading arrangement.
(11). The
seller shall clear all its dues prior to concluding any agreement for spectrum
trading. Thereafter, any dues recoverable up to the effective date of trade
shall be the liability of the buyer. The Government shall, at its discretion,
be entitled to recover the amount, if any, found recoverable subsequent to the
effective date of the trade, which was not known to the parties at the time of
the effective date of trade, from the buyer or seller, jointly or severally.
The demands, if any, relating to licenses of seller, stayed by the Court of
Law, shall be subject to outcome of decision of such litigation.
(12). Where
an issue, pertaining to the spectrum proposed to be transferred is pending
adjudication before any court of law, the seller shall ensure that its rights
and liabilities are transferred to the buyer as per the procedure prescribed
under the law and any such transfer of spectrum will be permitted only after
the interest of the Licensor has been secured.
(13). The
relevant provisions in the NIA for auction of spectrum with regard to
liberalization of existing spectrum holding in 800 MHz/1800 MHz band shall
apply. In respect of other bands, where spectrum has not been acquired through
auction, terms and conditions of liberalisation shall be as decided by the
Government from time to time.
(14). The
terms and conditions attached to the spectrum under the provisions specified in
the relevant Notice Inviting Application (NIA) document or otherwise shall
continue to apply after the transfer of spectrum unless specifically mentioned
in the guidelines.
(15). Buyer
will be allowed to use the spectrum acquired through trading to deploy any
technology by combining it with their existing spectrum holding in the same
band after converting their entire existing spectrum holding into liberalized
spectrum in that band as per the prevalent terms and conditions.
(16). The
buyer should be in compliance with the prescribed spectrum caps declared from
time to time. It is clarified that the spectrum acquired through trading shall
be counted towards the spectrum cap by adding to the spectrum holding of the
buyer. This will result in increase of spectrum holding of the buyer and
reduction in spectrum holding of the seller.
(17). A
TSP will be allowed to sell the spectrum through trading only after two years
from the date of its acquisition through auction or spectrum trading or
administratively assigned spectrum converted to tradable spectrum.
(18). In
case of administratively assigned spectrum converted to tradable spectrum after
paying the prescribed market price, period of two years will be counted from
the effective date of assignment of administrative spectrum.
(19). If
buyer is acquiring the entire spectrum holding of the seller in a spectrum
band, then it shall fulfil the associated roll-out obligations within the
balance time period for compliance subject to a minimum period of two years.
(20). If
the buyer is acquiring a part of the spectrum holding of the seller in a
spectrum band, then both buyer and seller will have spectrum holding in that
band after the trade. In such a scenario, both will be responsible for the
roll-out obligations. There is no change in the roll-out obligations prescribed
for seller, even if it is holding a lesser quantity of spectrum in that band
post-trade. In addition, buyer will also be required to fulfil entire roll-out
obligations. Since there is no change in the roll-out obligations of seller and
there will be additional roll-out obligations for buyer, the buyer shall be
given entire time duration to fulfil these roll-out obligations.
(21). If
the buyer has met some or all of its roll-out obligations through its prior
spectrum holding in that band, it shall be taken into account and the buyer
will not be required to repeat the required testing for roll-out obligations it
has already met.
(22). The
seller should clear its Spectrum Usage Charges (SUC) and its instalment of
payment due (in case seller had acquired the spectrum through auction and opted
for deferred payment) till the effective date of trade and thereafter, the
buyer shall clear all these dues.
(23). If
any TSP sells only a part of its spectrum holding in a band, both, buyer as
well as seller, will be required to pay the remaining instalments of payment
(in case seller had acquired the spectrum through auction and opted for
deferred payment), prorated for the quantum of spectrum held by each of them
subsequent to the spectrum trade.
(24). A
non-refundable transfer fee of one percent (1%) of the transaction amount of
aforesaid trade or one percent (1%) of the prescribed market price, whichever
is higher shall be imposed on all spectrum trade transactions, to cover the
administrative charges incurred by Government in servicing the trade. The
transfer fee shall be paid by the buyer to the Government. Transaction amount
refers to the amount payable by the buyer to the seller to purchase the rights
to use the spectrum block(s). It will be decided exclusively by the buyer and
the seller. The market prices shall be equal to the auction determined amount
prorated for the balance validity period of spectrum assignment. In case more
than one set of market determined prices are available, the latest market
determined price available at the time when the TSP wants to trade its spectrum
holding, would be applicable. If the auction determined prices are more than
one year old, the prevailing market price shall be applied by indexing the last
auction price at the rate of SBI PLR.
(25). The
payment is to be made by draft in favour of Pay & Account Officer (HQ), DOT
payable at New Delhi.
(26). The
amount received from trading shall be part of Adjusted Gross Revenue (AGR) for
the purpose of levy of License fee and Spectrum Usage Charges (SUC).
(27). Existing
rates as prescribed by the Government from time to time for Spectrum Usage
Charge (SUC) shall continue to apply on spectrum held by the buyer and seller.
The spectrum held by buyer shall include the spectrum acquired through trading.
Spectrum acquired through spectrum trading shall be treated akin to spectrum
acquired through auction.
(28). Frequency
swapping/reconfiguration from within the assignments made to the licensees
shall not be treated as trading of spectrum. The conditions in the NIA shall
govern frequency swapping/reconfiguration.
(29). A
licensee shall not be allowed to trade in spectrum if it has been established
that the licensee had breached the terms and conditions of the license and the
Licensor has ordered for revocation/termination of its license.
(30). Licensor
reserves the right to modify the guidelines from time to time as it may deem
fit.
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