Allocation only by January; DoT to seek deadline extension from apex court

The crucial spectrum auction has been pushed back to November.

The Empowered Group of Ministers on telecom, at its meeting on Tuesday, decided to approach the Supreme Court to seek an extension of the deadline the court had set.

The apex court had directed the Government to complete the auction by August 31 and cancel licences given out in 2010 by September 7.

According to the revised timeline prepared by the Department of Telecom, the spectrum sale will start on November 12.

The DoT will tell the Supreme Court that the delay is because the auctioneer will need time to set up the online system and finalise the auction guidelines. “The Government has taken all steps to speed up the auction process to fully comply with the Supreme Court orders in the most expeditious manner.

At the same time enough time needs to be given to the bidders to enable them to take all necessary steps to participate effectively in the auction including for raising funds,” an internal DoT document being prepared for submission to the Supreme Court stated.

Second extension

According to this document, the DoT will tell the Supreme Court that the auction is expected to be completed by December. But the allocation of spectrum will happen only by January 30, 2013. This is the second extension being sought by the DoT. The revised timeline finalised by the DoT indicates that the spectrum allocation will happen one year from the date of the initial court order in February.

This comes even as an earlier plea filed by department, seeking 400 days to conduct the auction, was rejected by the Supreme Court.

DoT sources said that time will be required following the auction as the applications for licence will need to be scrutinised. “A necessity may arise for seeking clarification for asking for additional documents. Similarly, adequate time will need to be given for the submission of bank guarantees before the grant of licences,” the DoT note said adding that the Government may not get market price if the process is rushed. The department has projected that the auction process would take 82 days from the date of commencement of bidding.

This auction is crucial to those operators whose licences are set to be cancelled and are looking to bring some certainty to their business by buying back part of the spectrum.

The sale is also important for incumbent players because the winning bid price will be used to determine the one-time fee for the existing spectrum held by various operators.

“Such delays are a matter of concern to us as they prolong the uncertainties we face. We urge the Government to conclude the auction process at the earliest,” Telenor Group said. The Norwegian company is keen to participate in the auction in a bid to keep its Indian operations running.

Sistema Shyam said that the difference between the reserve price of GSM spectrum and CDMA spectrum was not justified.

The Cabinet has fixed Rs 14,000 crore as the base price for GSM spectrum in the 1800 Mhz band and Rs 18,200 crore for CDMA in the 800 Mhz band.

(This article was published on August 7, 2012)
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