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Our Bureau

New Delhi, Dec. 12 After months of going back and forth the Department of Telecom has finally issued the detailed guidelines on how it wants to conduct the auctions for 3G and broadband wireless spectrum.

According to the information memorandum issued by the DoT, auctions for 3G will be held on January 16. Auctions for broadband wireless services using technologies such as WiMAX will be held two days after the 3G auctions are closed. Operators are required to put in their applications by January 5.

The guidelines, however, does not mention any roadmap for CDMA-based mobile operators, who were expecting to get 3G spectrum of their own in a separate frequency band. According to DoT sources, auctions for CDMA players may be held later and could be restricted to existing players since there is only limited bandwidth available.

On the controversial issue of spectrum usage charges, DoT has removed all ambiguity by categorically stipulating that the fees will have to be paid on the total revenues of existing 2G, 3G and broadband wireless services. The additional one per cent levy, earlier proposed by DoT for 3G services, has been done away with since spectrum charges for 2G have been increased.

The industry was divided over this issue with the GSM players wanting income from 3G services to be treated separately. DoT has not agreed to this demand.

For the first time, DoT has also made it clear that income from broadband wireless services will also be accounted for while calculating the levy.

While the guidelines do not mention the two per cent administrative charges suggested by the telecom regulator, it said it will decide on any additional fees at a later date.

There will be no 3G operator in Rajasthan due to lack of spectrum. Delhi and Gujarat will have three players, North East will get one and West Bengal has bandwidth for two. State-owned telecom companies will get one slot in each of the circles.

Therefore, bidding for the circles, especially Delhi, is expected to be high due to limited number of slots. In other circles, DoT plans to auction five berths for 3G services.

In the case of broadband spectrum, there is space for four operators in all the circles, of which one slot will go to BSNL or MTNL.

The auction itself will be a two stage process. In the first phase, operators will bid for the spectrum. Lowest bidder will be eliminated in each round. So if there are five slots to be filled in a circle, bidding will continue till only five operators remain in the fray.

All the winning operators will have to pay the same amount as quoted by the highest bidder. In the second phase, auction will be conducted among the five successful operators to decide on the specific frequency band that will be assigned to them.

This is relevant for operators who want to offer 3G services within a specific frequency band (similar to getting a corner plot in real estate parlance).

This round will be optional and operators who do not mind taking any frequency band can stay away from the bidding. A similar process will be followed for broadband spectrum as well.

More Stories on : Telecommunications | Regulatory Bodies & Rulings

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