DoT plans two-phase spectrum auctions between Feb and May

In an attempt to strike a balance between the need to put more airwaves up for sale and meet revenue targets for this fiscal year, the Department of Telecom wants to conduct spectrum auctions in two phases, between February and May next year.

The DoT is keen on holding one round of auctions on February 25, before the end of this fiscal year, and another on May 30, when additional frequency bands are expected to be vacated by the Defence forces.

While the auctions in February will adhere to the earlier schedule with spectrum in the 900 MHz, 800 MHz and the 1800 MHz bands, the one in May is for airwaves in the 2100 MHz, 2300 MHz and 2500 MHz bands. This proposal was presented by the DoT to the Minister of IT & Communications at a closed door meeting on November 12.

According to DoT officials, the plan takes into consideration the concerns raised by telecom operators. “The two-stage auction will allow those telecom firms that lose out in the February auction to have another opportunity to buy spectrum in May,” said a senior DoT official.

Under the earlier plan, the DoT had proposed to sell spectrum only in the 1800 MHz and 900 MHz bands, in February. However, telecom operators and the regulator had cautioned that auctioning spectrum without additional frequency bands would be disastrous. Consequently, the DoT is now looking at another round of auctions.

However, telecom operators say that even the new plan will not work. Rajan Mathews, Director General, Cellular Operators Association of India, said that selling spectrum in different phases will result in huge uncertainties.

“While auctioning additional spectrum is a good step, we want all of it to be sold simultaneously,” Mathews said. “Either the Government should act quickly and put all bands on sale in February if they are so keen on meeting Budget targets or they can extend the licence tenure of incumbent players and hold auctions in May.”

The operators feel that the DoT’s logic is 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.

The operators say that it is important to sell all spectrum in one go to reduce pressure on the 900 MHz band. But for that to happen, the Telecom Ministry will have to quickly get the Defence Ministry to vacate spectrum early.

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