Revised recommendations by India’s telecom regulator on spectrum management and licensing framework are expected to foster consolidation in the industry, credit rating agency ICRA said.
The Telecom Regulatory Authority of India “has now recommended more liberal (mergers and acquisitions) and spectrum sharing norms, which are expected to facilitate consolidation in the telecom industry,” ICRA said.
TRAI’s revised recommendations — which permit sharing of spectrum among the telecom service providers that hold spectrum — are likely to benefit established TSPs facing congestion, especially in urban/metro areas, enabling them to provide better service, the credit rating agency said.
The agency also said that the regulator’s recommendations for relaxing M&A norms are expected to enable consolidation in the telecom industry, which is grappling with subsidizing subscriber growth and high competitive pressures.
“The important policies now to watch out for pertain to spectrum refarming, pricing and assignment, which are likely to have critical bearing on the financial and operational profile of the TSPs,” the agency said.
The regulator has reiterated that refarming of 800/900 MHz band of spectrum should be done. TRAI has also said that it will come up with specific recommendations, including considering restricting auctions of 700 MHz band of spectrum to TSPs that do not possess spectrum in the 800/900 MHz band.
The recommendation to bar holders (established TSPs such as Bharti Airtel, Vodafone and Idea) of 800/900 MHz band from participating in 700 MHz auctions is likely to adversely impact their competitiveness, ICRA said.
