India’s DoT allowed spectrum sharing between operators with a higher levy based on the combined spectrum of both the operators. For example, if player A with 4.4MHz spectrum and player B with 4.4MHz spectrum agree to share spectrum, both had to pay spectrum charges on 8.8MHz. The norm allowed collaboration between operators as operators could share spectrum and infrastructure.
Spectrum sharing allowed two service providers to pool their spectrum resources, quickly roll-out services and increase the coverage area while economizing on the cost of the network. Spectrum sharing had the potential to generate significant efficiencies by permitting better utilization of existing spectrum, enabling service providers to achieve lower costs of production and better quality services.
Spectrum sharing therefore led to a win-win collaboration between Reliance Communications and Reliance Industries / Infotel Broadband. RCom has Pan-India GSM and CDMA spectrum, 3G spectrum in 13 circles (including Delhi and Mumbai) and Quality portfolio of 50,000 tower assets with adequate backhaul. Reliance Industries, on the other hand, with the ambition to become a pan-India telecom major (it already had pan-India BWA spectrum and surplus cash for investments) needed those assets to fulfil its ambitions.
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