The Department of Telecommunications (DoT) will auction three slots of third generation (3G) spectrum for all 22 telecom circles.
The successful bidders would have to make an upfront payment within 15 days of winning the 3G licence.
According to draft notice inviting applications (NIA), “The government has decided to assign through auction up to three blocks of 2x5MHz of paired spectrum in the 2.1-GHz band in each of the 22 service areas. This will be in addition to the one 2x5MHz block which has been allocated to BSNL/MTNL.”
Earlier, DoT had no frequency in Rajasthan and North-East circles for auction.
The move by DoT, which would come out with its NIA in the next few days, meant that Finance Minister Pranab Mukherjee’s target to raise Rs 30,000 crore from 3G auction incorporated in the Union Budget would not be fulfilled, since it was based on auctioning of four slots. This could have its bearing on the government’s budget deficit.
The 3G auction, which was slated for January 14, has been postponed to February 12. The differences between DoT and the Ministry of Defence have delayed the auction by over a year now. It was originally scheduled for December 2008.
The final date for submission of applications is January 25. The pre-qualification of bidders will be announced on February 5 and mock auction on February 9-10.
Some of the 3G spectrum being offered for auction is in the process of being vacated and it has been decided that the successful bidders will be allowed to launch commercial operations using the spectrum from September 1, 2010, the note states. Subsequently, they would be allocated specific frequency blocks within 15 days from the date of payment of the bid amount.
One more block of 2x5 MHz spectrum in 2.1 GHz is expected to be made available in January 2013, which will be offered only when available. The winners would also need to acquire a unified access service licence.
The government had earlier said spectrum auction would take place for four slots on January 14. Finance ministry was expecting Rs 35,000 crore from the auction and had budgeted for the current financial year to bridge the fiscal deficit. Further, there would be no restriction on the technology to be adopted to provide 3G services.
Successful bidders will provide details of technology they proposed to deploy before launching commercial operations.
The 3G licensee would also be required to provide service in at least 90 per cent of the service area within five years under the rollout obligations.
DoT and the defence ministry have been on loggerheads over availability of spectrum. DoT wanted to go for auction of four slots, but the defence ministry was unable to release enough spectrum. Subsequently, refuting claims of the defence ministry that only 10 MHz of 3G spectrum was available for 3G auction, DoT said it had enough spectrum to auction three slots.
“DoT does not agree with the Ministry of Defence that the entire 60 MHz of spectrum in the band of 1920-1980 is with the Defence and that only 10 MHz of 3G spectrum released by it on signing of MoU is available for auction,” DoT had said.
The defence ministry was supposed to release 25 MHz spectrum by December 7, after the Cabinet approval to set up an alternative optical fibre network for defence at a cost of Rs 9,175 crore. Despite the approval, the defence ministry did not release 25 MHz spectrum, and, thus, DoT was unable to release NIA on December 8.
