The union cabinet has decided to allow telecom companies to use spectrum allocated to them without auction to offer new services to consumers at a provisional price recommended by the telecom regulator.
The cabinet chaired by the Prime Minister Narendra Modi on Wednesday approved modifications to the policy to liberalise the commercial use of administratively allotted spectrum where market determined prices were not available.
This will facilitate optimal utilisation of spectrum by introducing new technologies, sharing and trading of spectrum, a telecom ministry release stated.
The most recent recommended reserve price will be taken as the provisional price for liberalisation of administratively allocated spectrum where auction determined price is not available.
Subsequent to the completion of the ensuing auction and with the availability of auction determined price, the provisional price already charged will be adjusted with the auction determined price with effect from the date of liberalisation on pro-rata basis.
This decision was taken on the basis of the recommendations of the sector regulator, Telecom Regulatory Authority of India's (Trai) and the government is expected to benefit by approximately Rs1,300 crore in this process.
Telecom operators have been seeking to make more liberal use of the spectrum allocated to them prior to 2010 on terms that did not allow them to use the radiowaves for new technology offerings.
The cabinet decision will allow companies to deliver third generation or fourth generation mobile services as well as to share and trade the spectrum with other operators.
It will also enable Reliance Communications Ltd (R-Com) to liberalise its spectrum in four telecom circles, where an auction determined price is not available, a PTI report said.
Briefing reporters after the cabinet meeting, communications and information technology minister Ravi Shankar Prasad said that wherever a market-determined price is not available for liberalising administratively allocated spectrum, Trai recommended provisional price shall be adopted and the balance collected after the actual auction.