Managing director of Videocon Telecom, said his company has already begun discussions with incumbents to acquire or offer spectrum in all the six circles they are present in.
The government is yet to notify the rules for spectrum sharing but that is not stopping domestic mobile service providers like Videocon Telecom from initiating talks with peers for collaborating on using each other's airwaves to push growth and improve quality of telecom services in their circles.
Arvind Bali, managing director of Videocon Telecom, said his company has already begun discussions with incumbents to acquire or offer spectrum in all the six circles they are present in.
"Today, we are talking to other operators for just spectrum sharing (not spectrum trading), where we will be providing 4G (fourth generation) service to customers. It's (spectrum sharing guidelines) yet to be notified but work (on spectrum sharing) has already started and we are in very, very active stage of discussions," he said.
Bali said Videocon Telecom was talking with "some incumbents", without naming them.
"They need our spectrum where they are not able to give 4G spectrum because the quantum of spectrum they own is less. So, if we merge spectrum then we will be able to give more voice and data services and provide both 2G (second generation) and 4G services. All kind of discussions are going on and there is definitely a lot of interest, Bali said.
The government has announced its decision to allow trading and sharing of airwaves and has come out with rules for it, but is yet to notify them.
On the spectrum trading front, the provision of including earnings from spectrum trading in the adjusted gross revenue (AGR) for the calculation licence fee and spectrum usage charges (SUC) is being seen by most as negative. Many analysts believe it could prove to be a "deterrent" for telcos looking at trading in airwaves as it would effectively entail a 13% levy — licence fee (8%) and SUC (5%) — for the seller of airwaves.
Bali desisted from seeing the provision as a deterrent and said it should be seen as any other tax hike.
"Spectrum trading will come soon. They (telecom operators) seem to have made up their mind because the route for it is simple – you start with spectrum sharing, move to its trading, and then follows the M&A. What other choice is there for telecom players? When the government increases tax you have to pay it," he said.
A senior executive of Vodafone, who spoke on condition of anonymity, said the second-largest telecom company would wait for notification of the rules for spectrum sharing and trading before taking a call on them.
Pankaj Mohindroo, national president, India Cellular Association (ICA), said telcos were looking at everything with a focus on consumer.
He said in a situation where the telecom industry was plagued by very scarce resources, capital and spectrum, sharing and trading airwaves was a way out to resolve the issues of quality of services and market expansion.
He said the government's move on addressing these were "good" but "more needed to be done".
He was also not very optimistic that spectrum sharing and trading would enhance mobile services and bring down the number of call drops, an issue behind which Prime Minister Narendra Modi has also put his might.
"I hope so (that quality of mobile services gets better). It will improve only slightly," said Mohindroo.
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