The Department of Telecom is in favour of auctioning spectrum in the 800 MHz band in the next round of sale scheduled for next year. This band, used for CDMA-based mobile services, found no takers in the auction that was held in November.
Some of the existing GSM players, including Vodafone, had recently expressed interest in this band and may bid if the base price is reduced. Since 800 MHz band is close to the GSM airwaves, it can be used by incumbent 2G players to offer data services.
Reserve price
DoT has told the Empowered Group of Ministers that spectrum in this band should also be sold by reducing the reserve price. The other option, according to the DoT, is to seek fresh recommendations from the Telecom Regulatory Authority of India but that would take at least 6 months to complete. In a note to the EGoM, the department said the TRAI would have to hold open house and conduct consultation process which could take time. Therefore, the spectrum should be sold without referring it to TRAI again.
DoT has followed a similar approach for finalising the auction rules for selling unsold spectrum in the 1800 MHz used for GSM mobile services. In addition, the DoT has made a blueprint to sell airwaves in the 900 MHz spectrum, which is currently used for 2G.
The DoT has proposed to put nearly 24 slots of spectrum on sale in the next round of auction. This includes 12 slots each in the 1800 MHz and 900 MHz bands. If the EGoM agrees to sell bandwidth in the 800 MHz band also, then, there will be 3 more slots up for grabs.
Each slot is of 1.25 MHz and operators will be allowed to buy at least four slots. Bidders will be permitted to buy up to 25 per cent of all spectrum assigned in different bands. The auction is scheduled to be held before March and the Government expects around Rs 25,000 crore from the sale.
This is a change from the recent auction that failed to attract aggressive bids because the Government had restricted the amount of spectrum to just eight slots with a rider that no player can acquire more than five slots. The base price was also high. As a result, there were no bids for the four circles of Delhi, Mumbai, Rajasthan and Karnataka in the GSM band.
Under the new plan, the DoT has reduced the reserve price by 30 per cent for the GSM bands. It has also put more spectrum on the block besides allowing operators to buy more than five slots as long as they do not corner more than 25 per cent of all spectrum available.
More spectrum
The DoT plans to put 15 MHz of spectrum in 1800 MHz band in Delhi and Mumbai for auction at a reserve price of Rs 485.15 crore and Rs 474.92 crore a block, respectively. In the previous auction, the Government had put only 10 MHz for auction divided into eight blocks of 1.25 MHz each for Rs 693.06 crore in Delhi and Rs 678.45 crore in Mumbai.