New Delhi: Winning bidders at auctions starting on 9 April for India’s third generation (3G) high-speed mobile licences may not get spectrum allocations as scheduled because the defence services may not vacate the frequencies in time.
The allocations are to be made by 30 September according to the department of telecommunications’ (DoT) notice inviting applications (NIA).
The defence forces were to give up some of the spectrum as they are getting a Rs10,000 crore optical fibre cable (OFC) network for their communications system. But work on the network, being built by state-owned Bharat Sanchar Nigam Ltd (BSNL), has been stalled for six months, likely delaying the vacation of spectrum, officials said. Orders for equipment were to have been placed by January this year.
“They might give the operators some trial spectrum so that the bidders can start importing equipment but at this point it is unlikely that the winners will get the spectrum by September,” an official with one of the firms working with BSNL said on condition of anonymity as he is not authorized to speak to the media.
BSNL issued a tender for the supply of equipment in December but shortlisted vendors complained that the specifications were too stringent. The tender was issued after the cabinet committee on economic affairs cleared the proposal.
Graphic: Yogesh Kumar / Mint
BSNL then had to write to the defence ministry in February asking that some of the norms be eased.
The terms in question include vendors having to be listed companies with their own manufacturing facilities within the country and the use of a particular kind of optical fibre cable manufactured by just a few manufacturers, according to officials.
Separately, the signing of the initial memorandum of understanding (MoU) between the defence ministry and the DoT in May last year had been delayed as the defence forces refused to relax some of the security requirements.
“The security aspect of the OFC (optical fiber cable) is most important to the defence and that is causing some delays. They will be sorted out,” a BSNL official said on condition of anonymity as he is not authorised to speak to the media.
The defence department is yet to respond to BSNL’s letter, said the official. Defence ministry officials declined to comment.
“There is a meeting next week between BSNL and the defence ministry to discuss the specifications,” the official added. “They have not replied to the letter asking for relaxation as yet.”
DoT has only two slots of 5 MHz in most parts of the country. A third slot is expected to be vacated by the defence forces by September and a fourth is expected to become available in 2013.
The auction was delayed by a month after the law ministry asked DoT to remove a clause from the NIA which stated that the government would refund bid amounts with interest if spectrum couldn’t be allocated within the specified deadline.
Still, “once the auction takes place, the government has commercial obligations towards meeting the September deadline”, said a telecom regulatory expert, who did not want to be named as he not authorized to speak to the media. “There are a number of variables involved,” he added.
Besides this, the government, in order to keep a check on the telecom department’s performance, has set deadlines with ratings and weightage for completing various policy measures, including the auction of 3G spectrum by June.