Govt sees bids for spectrum to be ‘few times’ reserve price

Govt sees bids for spectrum to be ‘few times’ reserve price

New Delhi: The government has said that it expects the auction for third-generation (3G) radio waves next month to bring in bids at a ‘few times’ the reserve price of Rs2,020 crore set by the Telecom Commission.

“I think a few times of the reserve price would be the auction price," Telecom Commission Member (Finance) R. Ashok said on the sidelines of the pre-bid conference on auction of 3G and BWA spectrum confirming that the 3G auction would be on time.

He further added that though the global financial situation was quiet different when the auction policy was announced than it is now but it is unlikely to effect the auction of 3G.

“Though the financial situation is quiet different that does not mean that it will have an impact on this auction," he said.

The Telecom Minister A. Raja had earlier said the government expected Rs30,000-40,000 crore from the 3G and WiMax auctions.

The government would conduct the global auction for 3G wireless spectrum starting 16 January and has set the reserve price for spectrum in all the service areas.

It would be first time an e-auction would be conducted. The bids would be put on the Internet. The last date for submission of applications is 5 January.

The government has also cleared the air over spectrum allocation confirming that successful 3G bidders would be eligible for 2G spectrum.

Addressing a pre-bid conference for auctioning 3G and BWA spectrum, Ashok said: “Successful 3G bidders will be eligible for getting 2G spectrum."

However, he clarified that 3G bidders will have to be in the queue.

Earlier, there was confusion whether 3G players would be eligible to get 2G spectrum.

COAI Director General T.V. Ramachandran said that this was technically correct. “The 3G players are eligible for 2G spectrum but they can get the spectrum only after the need of the existing players is met," Ramachandran added.

The government also expects to come out with the mobile virtual network operator (MVNO) policy by 5 January, when the auction of 3G spectrum commences.

Department of Telecommunications (DoT) Joint Secretary J.S. Deepak said: “We are hoping to come out with the policy on MVNO before the end of 5 January, which is the deadline for (the) application of 3G spectrum."

He added that a sub-committee of the DoT is looking at it.

As MVNOs do not have spectrum, they operate through commercial arrangements with licenced Mobile Network Operators (MNOs), buying bulk minutes of traffic and reselling them to their own subscribers.

As the government has limited the number of players that will offer services, the MVNO route will prove to be a good option for those looking at capturing a significant share in the world’s second-largest telecom market.

Mobile operators had conveyed to the Telecom Regulatory Authority of India (TRAI) the need to change the definition of an MVNO to preclude sharing spectrum with MVNOs.

The participants in the 3G pre-bid conference include RIL, Datacom, Ericsson, Swan, Shyam, Airtel, Tata Comm, Aircel, AT&T, Intel and others.