DoT comes around to auction spectrum at one go

Some good news for telecom operators as the Department of Telecom has indicated that it wants to auction 3G spectrum along with other frequency bands in the sale scheduled for February.

As a first step, the DoT has asked telecom regulator to expedite the base price recommendations for the 2100 MHz band so that auction could be conducted along with the auction of spectrum in the 800 MHz,900 MHz, and1800 MHz bands.

Consultation paper TRAI issued a consultation paper on Tuesday for valuation and reserve price of spectrum in 2100 MHz band.

Earlier, the DoT was planning to conduct spectrum auctions in two phases, between February and May next year. But telecom operators wanted the auction for all spectrum bands to happen together.

The operators felt that the DoT’s logic was flawed because the 2100 MHz band is not a substitute for existing GSM players. “Selling spectrum in the 2100 MHz and 2500 MHz bands is not a fallback option for an existing player but bringing these additional frequencies will ease the demand for 900 MHz by players who do not have 3G spectrum,” said a Mumbai-based operator.

Now with the DoT looking to sell all together the operators will have some breathing space. But the key question still remains as to how much spectrum will be put on the block.

Three scenarios The DoT is in talks with the Defence Ministry for the vacation of spectrum in the 2100 MHz band.

There are three possible scenarios under deliberation. If no spectrum is released by the Defence, then auction can’t be conducted in this band. The second scenario is that it releases 5 MHz in 17 circles.

The third scenario could be the Defence agrees to swap 2100 MHz spectrum with 1900 MHz. In that case, in addition to 5 MHz spectrum in 17 circles, it may release an additional 15 MHz on pan-India basis by swapping 2100 MHz spectrum with 1900 MHz. The operators are betting on the third option.

Telecom companies as well as the regulator have been of the view that the auction should take place only when adequate spectrum is made available, and the bidding should be held simultaneously for both the services — 2G and 3G.

The next round of spectrum auction is proposed to be held in February and the government is estimated to garner at least ₹9,355 crore from sale of radio waves.

According to estimates, auction of spectrum in 2100 MHz in February can fetch additional bids worth at least ₹5,000 crore.

COMMENT NOW