The Department of Telecommunications (DoT) has drawn a fresh auction plan to auction spectrum in the 1800 MHz and 900 MHz bands within the next three months, says news reports.
The second round of auctions will be held for the four circles – Delhi, Mumbai, Karnataka and Rajasthan which did not receive any bids in the recently concluded 2G spectrum auction.
Additionally, spectrum will be auctioned in Kolkata to enable re-farming of licences, since the licences of the operators are set to expire in 2014.
The spectrum auction plan drafted by DoT is aimed to help operators whose licence will expire in 2014 to decide on which spectrum band they want to bid for. As per the government?s re-farming policy, the existing operators? holding spectrum in the 900 MHz band will be asked to give it back and buy it afresh through an auction. According to DoT, the operators who do not wish to buy back their existing spectrum, should be provided with the option of bidding for spectrum in 1800 MHz band.
In a note to the Empowered Group of Ministers (EGoM) on telecom, DoT has said that in view of the interdependence between 900 MHz and 1800 MHz band prices, it would be appropriate that auction of spectrum in both these bands is conducted simultaneously in Delhi and Mumbai along with auction of spectrum in 900 MHz band.
DoT has also requested the EGoM to take a final view on the spectrum in 800 MHz band which is being used by CDMA players until now. Since the recently held spectrum auction did not receive any bids from CDMA players, the incumbent GSM players have suggested merging spectrum in the 800 MHz band with that in the 900 MHz band to increase the quantum of spectrum available for re-farming.
However, CDMA players including Reliance Communications have opposed this proposal and said that they would be interested in buying spectrum in the 800 MHz band if the government decides to reduce the reserve price. In the recent 2G spectrum auction, the base price for spectrum in the 800 MHz band was 1.3 times higher than that in the 1800 MHz band. CDMA players did not bid for the spectrum in the 800 MHz terming reserve price of the spectrum as too high.
