Vodafone, RCom, Tata Tele can’t bid for all-India spectrum

Our Bureau New Delhi | Updated on January 29, 2014


Department of Telecom clears eight bidders with restrictions for airwaves auction

The Department of Telecom has cleared the applications submitted by eight telecom players but has restricted Vodafone, Tata Teleservices and Reliance Communications from bidding for pan-India spectrum.

While Vodafone cannot bid for seven circles, RCom has been kept out of eight circles. Tata Teleservices cannot bid for spectrum in Delhi.

Cross-holding norms

Other players, including Airtel, Reliance Jio, Idea Cellular, Aircel and Telewings, have been allowed to bid for spectrum in any circle across the country. RCom has been disallowed to bid for spectrum in the eight circles where it operates GSM services through a subsidiary Reliance Telecom.

These circles are Assam, Bihar, Himachal Pradesh, Kolkata, Madhya Pradesh, North East, Orissa and West Bengal.

DoT has raised cross-holding norms that bars a single entity from two different owning operations in the same circle.

Similar rule has been applied to Vodafone as it operates in the country through multiple entities. Vodafone cannot bid in Assam, North East, Bihar, Himachal Pradesh, J&K, Madhya Pradesh and Orissa. But company insiders in Vodafone and RCom said that they never intended to bid for these circles.

Tata Teleservices has been barred from Delhi due to net worth issue.

Tata Tele has negative net worth, which according to DoT disqualifies it to bid as a new player in Delhi.

Airtel’s request

Meanwhile, Bharti Airtel has sought DoT’s permission to reduce the earnest money it paid from ₹3,700 crore to ₹2, 975 crore. Despite this the battle for spectrum is expected to be intense this time.

The renewed enthusiasm among the existing operators is primarily driven by two factors. One, the reserve price has been reduced from earlier rounds and, two, a number of licences are set to expire this year.

No choice

Since the Government has decided not to extend the tenure of the 20-year licences, operators such as Airtel, Vodafone and Idea Cellular have no choice but to bid for spectrum, especially in the 900 MHz band. The auction starts on February 3.

Published on January 28, 2014

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