special events and can allow the development of new technologies 

through access to test and development spectrum. 

It is particularly important to define clearly the nature of the rights and 

responsibilities associated with use of the spectrum being traded, to avoid 

potential disputes where spectrum is used outside the terms of the original 

right of use. Opening of secondary trading requires a lot of technical and legal 

preparedness and in any case is not linked with this exercise.  Perhaps it may 

not be advisable to consider secondary trading at this stage. 

6.3 Mergers 

and 

Acquisitions 

The future development of cellular markets is likely to witness consolidation 

between the Service Providers.  In the past 2~3 years, we have witnessed a 

number of consolidations in the industry. 

It is important to ensure that if two Service Providers merge they do not gain 

access to more spectrum than they require and that the spectrum be used 

efficiently.  The use of an appropriate pricing mechanism and a cap on the 

maximum amount of spectrum that can be retained would prevent this 

happening. 

The present guideline of M&A limit the maximum spectrum that the merged 

entity could hold to 2 x 15 MHz per Service Provider per service area for 

Metros and Category `A' Circles and 2 x 12.4 MHz per Service Provider per 

service area in Category `B' and Category `C' Circles. This cap on spectrum is 

independent of the cap envisaged in the spectrum allocation procedure. 

Once the spectrum cap is decided, there would need to be a fixed time period 

during which the new combined Service Provider is required to reduce their 

total spectrum to this amount. 

6.4 

Issues for consultation are 

Re farming of spectrum 

(i) 

What approach should be adopted to expedite the re farming of 

1800 MHz and IMT 2000 spectrum from existing users? 

(ii) 

What approach should be adopted for re farming of spectrum after 

expiry of license? 

Surrender of spectrum 

(iii) 

Should there be any refund for spectrum surrender in principle? 

(iv)  Should there be refund for spectrum surrender consequent to 

Unified Access license policy? If yes, what should be the basis? 

(v) 

How should the amount of refund be estimated? 

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