Cabinet approved salient features of spectrum trading on Wednesday based on the TRAI's recommendations on guidelines on spectrum trading. The government decision's to approve spectrum trading will allow mobile operators to buy and sell airwaves from one another. The decision is aimed to boost availability of frequencies to cellular companies to improve connectivity and address the issue of call drops.

Commenting on the cabinet decision, Communication and IT Minister, Ravi Shankar Prasad said, 'Spectrum ownership is that of the Government of India and right of use can now be traded. The problem of contiguous spectrum will be addressed due to today's Cabinet decision allowing trading of spectrum.'

'Telecom companies can enter into spectrum trading by informing the government 45 days in advance. The government will levy 1% trading fee,' Ravi Shankar Prasad added.