Simultaneous auction of 2G, 3G bands on the cards

Change in strategy as DoT, defence ministry resolve spectrum swapping issue

The Department of Telecommunications (DoT) is considering simultaneous auction in the 2,100-MHz spectrum along with that in the 800-MHz, 900-MHz and 1,800-MHz bands, in the auction scheduled to start on February 23.

Earlier, DoT had planned to auction spectrum in the 800-MHz, 900-MHz and 1,800-MHz bands at a go, 3G spectrum in the 2,100-MHz band a few months later by when, it hoped, the tussle between the defence and the telecom ministries on swapping spectrum in the 2,100-MHz band would be resolved. The change in strategy followed Communications and Information Technology Minister Ravi Shankar Prasad and Defence Minister Manohar Parrikar resolving the issue on Monday. The defence ministry has agreed to swap its 15-MHz spectrum in 2,100-MHz band with the same amount in the 1,900-MHz band, under the DoT.

"We want to auction the 2,100-MHz band with the others in February. However, this will depend on the completion of the paperwork on the swapping issue and when that is completed," said a DoT official. He added the ministry was waiting for the Telecom Regulatory Authority of India (Trai) to recommend a reserve price for the 2,100-MHz band. The reserve price couldn't be finalised earlier, as there was no clarity on the amount of spectrum that would be available for auction.

The official said in case the two ministries weren't able to arrive at a decision in the next few weeks, auction of the 2,100-MHz spectrum would have to be delayed, though estimates of how much spectrum would be available, as well as the base price, would be given to prospective bidders before the February auction.

With two operators set to return their spectrum in the 900-MHz band (across 18 circles) in 2015 and with hardly enough spectrum available in the 1,800-MHz band for even one operator in key circles, the availability of 15 MHz of additional spectrum in the 2,100-MHz band with the defence ministry will be the key.

The DoT hasn't been able to get any additional spectrum in the 900-MHz band from Bharat Sanchar Nigam Ltd (BSNL). Trai had suggested BSNL be asked to return 1.25 MHz spectrum in the 900-MHz band and DoT give BSNL the same amount of spectrum in the 1,800-MHz band. Earlier, the DoT had said asking BSNL to return spectrum in the 900-MHz band wouldn't be legally tenable, as the spectrum was being used by the state-owned entity.

The DoT has asked Trai to give a fresh recommendation on pricing spectrum in the 800-MHz, 900-MHz and 2,100-MHz bands.

It has also asked the regulator to recommend a reserve price for the 2,100-MHz spectrum.

The DoT also plans to auction spectrum in the 2,300-MHz and 2,500-MHz bands, primarily used for fourth-generation, or long-term evolution services, in 2015. The tentative timeline for the auction is May 2015, according to an internal discussion.

The policy guidelines on trading and sharing of spectrum are to be finalised by December 20 this year, according to the DoT discussion. Trai had already given its recommendations on the issues earlier this year. The DoT has agreed to these in principle, though it is yet to notify the final guidelines.