The Union Cabinet on Thursday approved the National Telecom Policy, 2012 that aims to do away with roaming charges, introduce a pan-India mobile permit that will enable mobile phone firms to offer all communication services, allow operators to share and trade spectrum and facilitate consolidation in the sector. Telecom minister Kapil Sibal said the Cabinet had made five changes to the new rules he had unveiled in October last year before clearing it. The key change is that the new policy states that spectrum will be refarmed, a move that has been strongly opposed by incumbent GSM operators. But the policy does not spell out details on refarming, which involves redistribution of spectrum in the 900 MHz band largely held by incumbents, and substituting it with frequencies in the 1800 MHz band.
FrIncumbent GSM operators have opposed the Cabinet’s move to make refarming a part of the new policy without consulting mobile phone companies on it, but declined to formally comment on it. The 900 MHz band that is largely being used by Bharti, Vodafone, Idea and BSNL is considered the most efficient band for offering 2G mobile services. Trai had recently proposed that these frequencies be redistributed amongst all operators through auctions when mobile permits of incumbents come up for renewal beginning 2014. GSM telcos have warned that refarming of the 900 MHz band would lead to investments of over .Rs 150,000 crore being made redundant. All mobile phone companies declined to comment on the new policy.
FrIncumbent GSM operators have opposed the Cabinet’s move to make refarming a part of the new policy without consulting mobile phone companies on it, but declined to formally comment on it. The 900 MHz band that is largely being used by Bharti, Vodafone, Idea and BSNL is considered the most efficient band for offering 2G mobile services. Trai had recently proposed that these frequencies be redistributed amongst all operators through auctions when mobile permits of incumbents come up for renewal beginning 2014. GSM telcos have warned that refarming of the 900 MHz band would lead to investments of over .Rs 150,000 crore being made redundant. All mobile phone companies declined to comment on the new policy.
The new rules aim to promote indigenous manufacturing and suggest that telcos source majority of their networks from domestic manufacturers by 2020. The new policy had a mixed impact on companies’ shares with Bharti Airtel closing at .Rs 302.10, up 0.1% while RCOM finished 1.1% up at .Rs 64.6%, Tata Tele (Maharashtra) was up 3.78% to close at .Rs 12.89 while Idea Cellular was down 2.93%, closing at .Rs 76.25.
