Timeline: 3G auctions in India

Timeline: 3G auctions in India

New Delhi: Day 3 of India’s long awaited 3G auction is currently underway, with 9 operators including Airtel, Vodafone and Reliance, participating. Successful bidders will be allowed to offer 3G services on a commercial basis from 1 September 2010.

The government will sell spectrum to three players across the nation for all 22 circles. (Circles are essentially zones that are decided after taking factors like geography and demography into consideration). A circle may have between 3 (most common) to 5 slots. The government has fixed a sum of Rs3,500 crore as reserve price for a pan-India 3G spectrum.

The auction for 3G spectrum was postponed several times in the past owing to indecisiveness among policy-makers over issues such as availability of spectrum, the base price, the number of players that could be allowed in each circle and a reluctance on the part of the defense ministry to vacate the designated spectrum for commercial use. (Listen to a podcast explaining the delay of 3G auctions in India)

The auction will be conducted online, with each participant bidding anonymously to maintain secrecy. The auction, monitored by the Telecom Ministry, will start with a reserve price of Rs. 320 crore for the metros, and is expected to make Indian administration’s coffers richer by about Rs. 35,000 crores. The auctioneer will raise the base price by 10 - 1% at every stage till the difference between the number of slots and bidders is less than three.

3G services when manifested will facilitate high-speed content download, video-calling, live-streaming and other broadband services. (Read more on that here)

Although the Defense Ministry’s control over air-space in certain parts of the country may hamper a full-fledged implementation immediately.

India, which is the fastest growing and second largest telecom market in the world, may expect 3G services, by successful bidders, from October onwards.

In the timeline below we outline 3G’s journey, in a reverse-chronological order, moving from the auction (underway at the moment) to its proposal by TRAI (May 13, 2005) .

TIMELINE

9 April 2010 : 3G auctions underway

5 April 2010 : Mock 3G, BWA e-auction takes place smoothly

• A mock e-auction of spectrum for third generation (3G) mobile phone services and broadband wireless access (BWA) is conducted smoothly.

• Invitations are sent by the Department of Telecommunications (DoT) to 21 officials including Sam Pitroda, adviser to the Prime Minister; Pratyush Sinha, chief vigilance gommissioner; Vinod Rai, comptroller and auditor general of India, Deepak Parekh, chairman of Housing Development Finance Corp. Ltd.

30 March 2010 : Bharti announces that it will launch 3G services by year-end

• Subject to its success in the auction on April 9, 2010, Bharti says it may be able to offer 3G services from October 2010.

• Airtel, which has a subscriber base of 124.6 million, already has 3G-ready devices

30 March 2010 : DoT publishes a list of pre-qualified bidders for 3G and BWA services, fuelling expectations that the long-awaited sale may finally take place next month.

• The Government collects a total of Rs5,806.25 crore in earnest money from potential bidders.

19 March 2010 : Total number of 3G applicants reaches 9

• The submissions by Idea and Aircel take the total number of applicants for 3G spectrum to nine operators for four licenses that will allow pan-India coverage. Five of the 22 operating areas, or telecom circles, have five slots of 3G spectrum up for auction.

• Videocon bids for 3G airwaves; eyes overseas partners. The firm is in talks with European and US companies for partnering its 3G operations in the country.

18 March 2010 : Bharti Applies on 3G mobile spectrum bid

27 February 2010 : BSNL launches 3G services in 11 cities

• India’s No. 4 mobile operator, BSNL, says in a statement that it has invested Rs27 billion ($530 million) on rolling out 3G infrastructure which will cover all district headquarters and important commercial towns.

25 February 2010 : 3G auction to open doors for foreign players: Economic Survey

• The economic survey 2009-10 tabled in Parliament finds that the government’s target to get 600 million wireless mobile subscribers by the end of the 11th Five-Year Plan (2007-12) has been achieved before the end of 2012; it describes the growth as ‘spectacular’.

24 February 2010 : Govt to hold 3G spectrum auction on 9th April

• Application dates are fixed from 25th February – 19th March.

• The government says it expects Rs35,000 crore from the auction.

• The move comes after the law ministry gives approval to the NIA (Notice Inviting Application), paving the way for the government to go ahead with the auction.

30 January 2010 : Further delays announced in 3G auctions

• Law minister Veerappa Moily, a member of the empowered group of ministers (eGoM), is reported to have said that the auction should he held when the spectrum is available.

• The eGoM, headed by finance minister Pranab Mukherjee, had earlier decided to allow four private telecom firms for 3G services and had made a provision for garnering up to Rs35,000 crore from the sale of airwaves in the current fiscal.

20 January 2010 : DoT may prohibit Mergers & Acquisitions among 3G players

• DoT, in an internal note, says, “The NIA (Notice Inviting Application) will prohibit merger of successful bidders in the current auction."

• The note also states the new 3G entrants, who would able to secure 2G licenses after paying the due amount as per the policy, will not be able to get spectrum any sooner than 2G licensees who are still on waiting list.

15 January 2010 : 3G auction to be completed by March, says Pitroda

• Sam Pitroda, advisor to Prime Minister, says he expects India to complete the auction of 3G licenses by 31 March.

• The Centre had set 14 January as the tentative deadline to start taking bids for the airwaves as per its schedule announced in October 2009.

12 January 2010 : 3G auction comes to an abrupt halt, in part because an old issue between DoT and ministry of defence resurfaces.

• Citing an agreement, signed in May 2009, with the DoT, the army is unwilling to vacate spectrum till the OFC network is ready in time. According to the agreement, the Armed Forces were to vacate the spectrum by August 2010.

10 January 2010 : 3G bidders to be allowed to pay in 2 parts

• Successful bidders to be allowed to pay in two parts: one at the time the winning bids are chosen and the second when spectrum is finally allocated.

• One of the main reasons for allowing bidders to pay in two portions is that it would level the playing field, giving bidders with smaller balance sheets time to raise three quarters of the money.

22 December 2009: Govt presses ahead with 3G auction

• Telecom minister A. Raja tells reporters that the “auction will be according to the schedule."

• Raja says that “There is a consensus in the eGoM on vacation of spectrum and it would be allotted simultaneously to all the four winners by August 2010."

• A few days earlier, Pranab Mukherjee, said that he expects direct tax collections to touch Rs. 4 trillion above the Rs. 3.79 trillion budget estimate.

19 November 2009 : Bidders likely to lap up 3G, thanks to spectrum

17 November 2009 : Grey areas cloud 3G auction prospects

• Thin attendance at pre-bid conference. A pre-bid conference is a scheduled meeting where all the parties involved meet to discuss the project and to clarify doubts if any.

• Similar pre-bid conference held on 23 December last year had better attendance.

12 September 2009 : 3G auction to be held on 7th December

3 June 2009 : Delay in 3G auction led to $16 billion loss: study

29 January 2009 : Cabinet refers 3G issue to the cabinet

16 November 2009 : DoT hold a pre-bid conference with industry and key stakeholders

16 October 2009 : TRAI (Telecom Regulatory Authority of India) replies to DoT’s request for comments/recommendations on access of spectrum and pricing.

11 September 2009 : DoT issues “revised Auction Time Table for 3G and BWA spectrum."

• Announces that the NIA will be issued on 26th October 2009 and the final auction process will start on 7th December 2009.

23 December 2008 : Pre-bid conference with industry stakeholders

15 December 2008 : DoT issues 3G auction timetable

23 May 2008 : 3G, Wimax policy by June, roll out by Jan 2009: Raja

• Raja, minister for Communications & IT, at the Global Telecom Summit organized by Assocham, says, “If there is common auction or open auction, there will be no bar. Up to 74% FDI is allowed in Indian telecoms firm, and these partnerships can also start 3G service. Either way foreign players will be allowed."

13 May 2005 : TRAI submits its recommendations on 3G spectrum

• TRAI suggests that the allocation of spectrum for 3G be done without any additional costs. It suggests “an additional annual per MHz charge" till service provider rolls out 3G services, instead of a one-time entry fee.

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