In a major attempt to square away the 2G spectrum licensing disarray, Telecom Minister Kapil Sibal explained the wide-ranging outlines of the New Telecom Policy (NTP), 2011.

According to this, individual operators would be allotted spectrum of up to 6.2 MHz as permitted in the license specifications and a new additional payment mechanism would be applicable further, which is in contrast to Telecom Regulatory Authority of India’s (TRAI) recommendations made in May 2011.

In a clear move, in future, operators would have to pay a market-determined price in receipt of spectrum apart from availing a new telecom license at a nominal uniform entry fee for all licenses. Thus NTP, 2011 detaches the very connection between the issue of license and spectrum allocation.

Several existing license holders, with 4.4 MHz as per old policy, will now have to pay market-determined rates to avail any other additional spectrum including the next 1.8 MHz as prescribed in NTP, 2011. The adversely affected new operators include Uninor, Etisalat and Loop and the GSM businesses of Tata Teleservices and Reliance Communications, who earlier were allocated 4.4 MHz of spectrum.

The spectrum price as determined by the market could be well achieved through suggestions made by TRAI or via auctions under its regulations. Enforcing NTP, 2011 would mean that the pre-existing allocations based on subscriber-linked criteria, start-up plan and additional spectrum would come to a halt.