Let a consortium or a body hold airwaves and firms pay according to usage, says internal note.
The department of telecommunications has proposed doing away with the system of auctioning spectrum.
The proposal, circulated for a wider discussion within DoT, has pitched for a system in which a group of stakeholders or an independent body will hold all the available spectrum and the companies will pay according to usage.
DoT has suggested the system be used for spectrum in the 700 MHz band, expected to be used for 4G services, and also the 900 MHz band, a chunk of which is already with 2G operators.
At present, a large part of the 700 MHz spectrum is being used by public broadcaster Doordarshan. DoT has already sought vacation of this band for telecom operators.
The move to shift to the use-&-pay system, DoT says, is expected to ensure more efficient use of spectrum. It will also reduce the huge capital costs that telecom companies have to bear for buying spectrum in auctions. These costs ensure the companies cannot lower rates.
The 900 MHz band is being used for GSM mobile services, while there is about 108 MHz spectrum in the 700 MHz band, of which 24-48 MHZ is with government agencies and 36 MHz is being used for commercial services. The rest is with Doordarshan.
The proposal points to some problem areas in spectrum
For instance, while globally most 3G operators get around 20 MHz spectrum, in India the companies have been given only five MHz each. It says the auction process is one big reason for this fragmentation.
The model is on the lines of OpenNet in Singapore, a joint venture between four companies -- Axia NetMedia, Singapore Telecommunications, Singapore Press Holdings and Singapower Power Telecommunications.
OpenNet is responsible for building, managing and operating the high-quality platform for Singapore's next generation nationwide broadband network, which will be used by all the stakeholders.
The network is part of the Intelligent Nation 2015, or iN2015, a blueprint to turn Singapore into a sophisticated city with seamless high-speed connectivity.
The government is already talking of allowing spectrum-sharing because of the scarcity of this valuable resource.
However, the Telecom Regulatory Authority of India has been looking at using the 700 MHz spectrum for 4G operations.
The government had last year auctioned 3G and broadband wireless access spectrum in 2.1 GHz and 2.3 GHz for over Rs 1 lakh crore (Rs 1 trillion).
