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The Department of Telecom has indicated to the Prime Minister's Office that it will auction 2G spectrum over the next 8 months. The department has also given the status of spectrum availability after cancellation of 122 licences. The availability varies from a minimum of 16 units of spectrum in Delhi to a maximum of 47.4 units in Tamil Nadu.
If each bidder is given 4.4 units of spectrum then there will be enough slots to accommodate at least 3 players in Delhi and 11 operators in Tamil Nadu. In addition, the Telecom Ministry is also in discussion with the defence forces to vacate additional airwaves. According to a presentation prepared by the DoT, a total of 923 units of spectrum across all circles will be available post creation of the Defence band.
This is more than three times the pending requests for airwaves. The DoT presentation indicates that the current demand is for 312 units of spectrum. “From a situation of spectrum crunch now we have a situation of spectrum surplus. This makes it very important to take the right decision on the auction model in terms of whether or not to put everything available in the market in one go or should only a section of the operators should be allowed to bid,” said a top DoT official.
Since the new telecom policy will have ramification for the proposed 2G auction, DoT will submit a detailed Cabinet note by March 21. Among other issues, DoT will seek Cabinet's approval on unified licensing, spectrum pricing for existing players, spectrum charge and merger & acquisition rules.
Once the Cabinet approves the policy, DoT will take the auction plan to a Group of Ministers to finalise the base price, number of slots to be sold and eligibility conditions. New players, whose licences are going to be cancelled, want the base price to be fixed at Rs 1,650 crore and existing operators kept out of the auction. Incumbent operators want the auction to be opened up for everyone.
DoT is also looking to auction additional 3G spectrum in the next 12-18 months. According to the internal presentation, the Telecom Regulatory Authority of India will be asked to send its recommendations over the next 420 days and the auction will be completed in 688 days.
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