The Hindu Business Line : DoT may impose eligibility conditions for 3G auction

Snapshot
It may be mandatory for bidders to have one year experience in rolling out telecom services and have at least 5 lakh mobile subscribers.
If the proposals are accepted new players including Videocon, Unitech and Swan will be out of reckoning.

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New Delhi, June 14 In a move that could queer the pitch for some of the new telecom licence holders, the Department of Telecom is considering to impose eligibility conditions for participating in the auction for third generation (3G) mobile services. While the auction will be open to new and foreign players, DoT may make it mandatory for the bidders to have a minimum of one year experience in rolling out telecom services in any part of the world and have at least 5 lakh mobile subscribers.

If this pre-qualification condition is put in place, new players including Videocon, Unitech and Swan will be out of reckoning as these companies do not have any experience in running a mobile business. They were issued universal access licences only recently and will roll out services only by the year end.

The only option left for them would be to off load equity to strategic partner like AT&T or other international telecom players, which are looking to foray into India.

Senior DoT officials explained that the proposal was aimed at keeping out non serious players from bidding for 3G spectrum, which is in limited supply.

“While we want to open up the auction for international bidding, we also do not want a situation wherein a non serious player gets into the fray and derails the entire process. 3G services should be available to consumers at the earliest and the policy should ensure that,” said a DoT official.

The proposal also has the backing of the Finance Ministry and the Law Ministry.

In a report given to the Government, the Department of Legal Affairs said: “We are of the view that it is legally permissible for the Government to specify pre-qualification for international competitive bidding. In respect of new licencees who do not have prior experience in the telecom sector is concerned, it may be stated that no right has been accrued by them for bidding for 3G spectrum,” the Law Ministry said in its opinion.

New players miffed

However, new players are peeved at being left out.

“If the new players do not have the right accrued for bidding for 3G, the existing players also do not have that right. Policy should not deprive any section of the industry a fair chance to bid for 3G spectrum. If we were non-serious players then we would not have invested in taking pan Indian licences by paying Rs 1,600 crore,” said one of the new operator.

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