The Hindu Business Line : 3G auction: DoT offers sops to lure foreign firms

Spectrum auction
New players who win 3G licence will also be eligible for getting 2G spectrum
ISPs have been called for a separate meeting on Wednesday
On auction for CDMA operators, a separate process will be carried

Our Bureau

New Delhi, Dec. 23 In a bid to create interest among foreign players for the upcoming 3G spectrum auction, the Department of Telecom today said that new players who win third generation mobile licence will also be eligible for getting 2G spectrum without any additional entry fee.

Though the turnout of foreign players for the pre-bidding conference held today was dismal, DoT hoped that it will get a good response on January 5, the last day for putting in the applications.

“We are hoping that the auction will draw in bids that are few times higher than the reserve price of Rs 2,020 crore. The global financial crisis will not affect the auction for 3G services,” said Mr R. Ashok, Member (Finance), Telecom Commission, the apex government body for the sector.

Earlier foreign players had said that it was unfair to ask them to pay an entry fee without any guarantee of getting 2G spectrum. They had also said that there was no business case for a standalone 3G player.

A&T, Intel

While international players including AT&T and Intel attended the pre-bid conference, it was the existing players such as Bharti Airtel, Vodafone Essar and Reliance Communication that showed more interest in getting clarifications on the bidding process. DoT officials said that attendance for the pre-bid conference did not indicate the lack of interest among foreign players as many would have sent their Indian nominees or consultants.

DoT also said the second highest bidder during the auction will not get the frequency if the highest bidder fails to get licences for not meeting the desired norms. Industry observers said this could open the door for non-serious bidders to delay the auction process by quoting astronomical amounts and then fail to fulfil the conditions for getting unified access.

Addressing concerns raised by Internet service providers (ISPs), DoT said that Internet licence holders need to take a unified licence or pay the entry fee of Rs 1,650 crore if they win broadband spectrum. ISPs have been called for a separate meeting on Wednesday by DoT to discuss other issues including the Government order to vacate all spectrum currently held by Internet operators.

On auction for CDMA operators, DoT said that a separate process will be carried for them at a later date. This could include limited auction among existing players. DoT has called for a meeting with CDMA operators to discuss the various options next week.

Rothschild presentation

N M Rothschild, the agency which will conduct the auction, gave a detailed presentation on the process. The auction will be held in two stages simultaneously for all the 22 circles.

During the same conference, DoT said that rules governing Mobile Virtual Network Operator may be announced in the first week of January.

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