The Department of Telecom is looking to sweeten the auction deal by putting more spectrum on the block.
The Department has started talks with the Defence forces to get 55 Mhz of spectrum more in the 1,800 Mhz frequency band. If this comes through, there will be enough bandwidth to accommodate three-five players in each circle.
While the DoT has backed the base price set by TRAI, the move to get more spectrum freed up will enable the operators buy it cheaper than bidding for just one slot.
TRAI had proposed selling only 5 Mhz spectrum, which is enough for just one player. This is one of the sticking points with the industry, which has taken a view that the regulator's move will put an artificial squeeze on the supply of spectrum. The regulator has justified the move, saying that a large chunk of the available spectrum should be reserved for re-farming.
In a presentation to the Empowered Group of Ministers, the DoT has envisaged three auction scenarios including one where it is able to get the additional 55 Mhz spectrum vacated by the Defence forces. The DoT has stated that in case Defence forces give up 55 Mhz of spectrum, then it will have 47 slots of 5 Mhz chunk across the country compared with just 33 slots without it.
The extra bandwidth will be able to accommodate four players in three circles, three players in another four circles, five players in one circle, and two players in seven circles even if spectrum is reserved for re-farming in 2014 when the 20-year licences of incumbent operators come up for renewal.
The DoT has also presented the option of not keeping any spectrum for re-farming, in which case the number of 5 Mhz slots available go up to over 100. This is the best case scenario for which the operators are lobbying hard. They want all available spectrum to be put on the block in order to give a fair chance to more number of operators. In addition, the operators want the base price to be reduced by at least 80 per cent. The final decision on these issues will be taken by the EGoM after getting recommendations from the Telecom Commission.
Meanwhile, the DoT has initiated steps to finalise the auctioneer. On Thursday, it floated a Request for Proposal inviting bids from interested auctioning firms. Interested firms have been asked to submit sealed bids by June 11 and the auctioneer will be selected on June 20. The DoT plans to issue the information memorandum for conducting the auction on July 15.