DoT plans ranking system for contiguous spectrum auction

Written by Jayati Ghose | New Delhi | Updated: Nov 16 2013, 10:18am hrs
The department of telecom (DoT) is planning a first-rank, first-served process for the allocation of contiguous (continuous without a break) radiowaves in the 1,800 Mhz band to operators in the upcoming January spectrum auctions. Under the new process, bidders would be ranked based on the specific time of placing a bid, with higher rank holders being automatically eligible for spectrum allocation.

Most of the spectrum being put up for sale in the next round of auctions in the 1,800-Mhz band is not available in contiguous blocks of 5MHz since these radiowaves were made available from the cancelled 122 licences issued to new 2G players in 2008.

In only a few areas spectrum is continuous. While non-contiguous spectrum works for offering voice services, higher technologies need the airwaves to be available without a break. The need for contiguous spectrum becomes even more important since the spectrum being sold is liberalised that would essentially allow the winner to use it for any technology 2G, 3G or 4G.

During an inter-ministerial committee (IMC) meeting held last month, it was opined by the members that the auctioneer may suggest an objective parameter for inter-se ranking, for allocating contiguous spectrum while having one stage auction only.

The IMC also suggested that time-stamps of bids as a parameter could be opted as an option. The auctioneer has been asked to provide details in this regard.

Earlier, the inter-ministerial committee had taken a view that such contiguous blocks of airwaves could be sold at a premium.

That option has, however, been discarded as the IMC members decided that charging a premium for contiguous spectrum would cause problems in future, in view of the likely government policies for spectrum trading/swapping.

The option of holding a two-stage auction, wherein the first stage would be for price discovery and second for getting contiguous spectrum with a premium, was also discussed and discarded in the October meeting of the IMC.

The inter-ministerial committee includes members from DoT, Planning Commission, wireless planning wing, department of industrial policy and promotion and the department of economic affairs.

For the auctions held in November 2012 and March 2013, spectrum was sold in slots of 1.25MHz with new operators needing a minimum of 5MHz to start operations.

In September, the Telecom Regulatory Authority of India proposed that the government sell spectrum in slots of 200KHz in order to significantly improve the efficiency.

The government plans to hold spectrum auctions in the 900MHz and 1800MHz bands from January 21 onwards. DoT is also looking into the possibility of including 3G spectrum in this auction.