The Hindu Business Line : DoT spells out 3G auction procedure

New Delhi, April 14 The Department of Telecom may give preference to existing mobile operators, including Bharti Airtel and Vodafone, in case of a tie during the auction process for third generation mobile services.

The number of subscribers and annual revenues are the other two tie-breakers identified by the DoT, if more than two companies end up quoting the same price during the bidding process.

“If there is a tie between bidders and one such bidder happens to be an existing service provider in the concerned area, the existing operator should be permitted to participate in the next round as the existing one will be able to roll out network faster,” DoT said in its draft guidelines.

In case the tie is between two existing operators, then the company with higher subscriber base will be allowed to go to the next round of bidding. If the two operators have similar subscriber base, then the company with higher annual revenues will go to the next round.

The auction will take place online for 5 Mhz in each circle. The lowest bidder in each round will be eliminated. Once the number of bidders remaining is equal to the number of spectrum blocks available in the service area, the auction will close. All the companies who win the bidding will have to match the amount quoted by the highest bidder.

Every bidder will have to deposit an earnest money guarantee per block of spectrum, which is 25 per cent of the reserve price fixed by DoT. Winning bidders will have to pay 25 per cent of the bid amount immediately and the balance within 7 days. In order to give every bidder a chance to get a feel of the bidding process and the value of spectrum, all the companies participating in the auction will be taken automatically to the second round without any elimination.

DoT had earlier announced that 3G auction will be open to both new and existing licence holders. Companies without a licence can pay Rs 1,650 crore and acquire a unified licence, specifically for taking part in the bidding process.

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