COAI welcomes Telecom Commission's decision to ease spectrum holding caps

KOLKATA: Mobile phone companies have welcomed the Telecom Commission’s decision to ease spectrum holding caps, saying it will facilitate M&As and ring in cost savings, but expressed dismay over government inaction on the industry’s repeated calls for reductions in spectrum usage charge (SUC), USOF levies, and licence fees.

“The Telecom Commission’s decision to increase overall spectrum cap will facilitate M&As in the sector, bringing in significant cost saving and reduction in competition, stabilising the sector in the long run,” said Rajan Mathews, director general of Cellular Operators Association of India (COAI), the apex industry grouping representing telcos such as Bharti Airtel, Vodafone India, Idea Cellular and Reliance Jio Infocomm amongst others.

Mathews, however, said the TC’s decision extending the payments tenure for auctioned airwaves from 12 to 16 years would only ease cash flows in the initial years and “not offer any real tangible financial benefits to the industry”.


“The telecom industry will end up paying more over the life of the debt arising from the lengthened time period of payments, and the additional payment is likely to be a whopping Rs 80,000 crore,” he said.

Along with extension of the deferred payment schedule, the government should have ideally “prescribed a nominal interest rate instead of existing ones,” said Mathews.

The commission, the apex decision-making wing in the communications ministry, earlier this week backed the Telecom Regulatory Authority of India’s suggestions to remove the 50% cap on intra-band spectrum holdings of telcos, and also increase the overall airwaves holding limit to 35% from 25%. It, however, imposed a separate 50% cap on combined spectrum holdings in the sub-1 GHz bands (read: 700 Mhz, 800 Mhz and 900 Mhz bands).

Mathews said the telecom industry is also disappointed that the government did not do much to address systemic issues such as reduction of USOF levy, licence fees and SUC that had been recommended by the sector regulator”.