Mock auction of 3G spectrum today

Mock auction of 3G spectrum today
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First Published: Sun, Apr 04 2010. 10 23 PM IST
Updated: Sun, Apr 04 2010. 10 23 PM IST
New Delhi: Applicants for third-generation (3G) mobile telephony services and broadband wireless access (BWA) will on Monday participate in a mock e-auction that will make the process transparent for bidders and help the government obtain market-determined prices.
“The mock auction has been primarily designed to help the potential bidders get used to the system and clarify any queries they may have about the auction,” said a senior department of telecommunications (DoT) official on condition of anonymity as he is not authorized to speak to the media.
Nine telecom companies have bid for three-four slots of 5MHz of 3G spectrum, while there are 11 bidders for two slots of BWA. Winners will be able to offer customers high-speed voice and data transfer and multimedia services.
The actual auction is scheduled for 9 April. The BWA auction will take place two days after the 3G auction is over.
“This is the first time the government is auctioning any asset in this manner, so it will be a learning for us as well,” the official quoted above said.
Designed by NM Rothschild and Sons (India) Pvt. Ltd and DotEcon Ltd, the e-auction allows applicants to bid from their computers. To ensure the secrecy of individual bids until the real auction, only the value of the highest bid and the number of bidders in each round for each telecom circle—or operating area—will be visible to each bidder.
Telecom operators and technology analysts have welcomed the mock auction. “It would take a much longer time had the government decided to go the tendering way or any other way,” said a senior executive from a large telecom service provider on condition of anonymity. “The (new) system is far more transparent.”
Kunal Bajaj, managing director of technology consultancy BDA Connect (India) Pvt. Ltd, said the mock auction would rule out chances of dispute or winners backing down after bidding too much. “In this design, bidders can opt in or opt out and it resolves the issue of transparency and price recovery, while helping a firm build a sound business model for the asset,” he said.
shauvik.g@livemint.com
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First Published: Sun, Apr 04 2010. 10 23 PM IST