India to allow consolidation in crowded cellular sector

India will let cellular carriers share airwaves and allow for consolidation in a crowded industry that has been battered by ferocious competition as well as a licensing scandal that may have cost New Delhi up to $39 billion in lost revenue.

Under a draft telecoms policy unveiled on Monday, second-generation mobile spectrum that now comes bundled with a telecoms license will be separated and priced on a market basis, which means operators will have to pay for additional network capacity, driving up costs. With more than 850 million users, India's mobile market trails only China's. The difference is that 15 players slug it out in India; in China there are only three. Operators have long said the Indian industry is ripe for a shakeout. The new policy will "facilitate consolidation in the converged telecom service sector while ensuring sufficient competition," Telecoms Minister Kapil Sibal told a briefing, where he announced several initiatives but gave few details.