DoT suspends spectrum sharing, trading till auction concludes

The government wants to ensure the 29 September auction, in which airwaves worth Rs5.63 trillion would be sold, attracts good interest from bidders

The spectrum auction is scheduled to start on 29 September. Photo: Pradeep Gaur/Mint
The spectrum auction is scheduled to start on 29 September. Photo: Pradeep Gaur/Mint

New Delhi: The department of telecom (DoT) has suspended spectrum sharing, trading and liberalization activities till the provisional results of the upcoming spectrum auction are declared.

“The Spectrum Trading Guidelines... would remain suspended during the time of conduct of auction i.e. from the date of issue of NIA (notice inviting application) for auction of spectrum to the date of publishing of provisional result of the auction,” the amended spectrum sharing and trading guidelines said on Wednesday.

Similarly, the DoT has suspended spectrum sharing and liberalization activities as well. The move may impact merger of Reliance Communications Ltd (R-Com) with Sistema Shyam Teleservices Ltd as well as R-Com and Aircel Ltd to some extent.

According to people familiar with the matter, this move by the government is to ensure that the upcoming spectrum auction, in which airwaves worth Rs.5.63 trillion are being put for sale, attracts good interest from bidders.

The auction rounds are scheduled to start on 29 September. There is no certainty when the auction would end. In 2010, bidding rounds for 3G spectrum closed after 34 days.

The government expects to get around Rs.64,000 crore from the sale of airwaves this fiscal. However, experts feel that the upcoming auction will see moderate participation.

“This could in view of calculating spectrum cap. It would be difficult to assess if a company is bidding in the auction and simultaneously engaged in spectrum trading or sharing deal,” Khaitan and Co. Llp associate partner Harsh Walia said.

Ratings firm Icra expects moderate participation in the auction that would fetch the government worth around Rs.60,000–65,000 crore and elevate the industry debt level to around Rs.4.7 trillion from the current Rs.4.1 trillion.

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