The department of telecommunications (DoT) has eased the rules for companies planning to participate in the auctions for airwaves due in February.
The DoT has given freedom to the telecom service providers to switch between technologies. This will make the roll out of 4G technologies easier. As per the notice issued for the auction, slated for February 3, telecom firms were required to provide information regarding any new technology they wanted to deploy one year before starting trials.
However it has left to the companies the responsibility of ensuring that each mobile handset has a filter to avoid interference from nearby spectrum being used by other companies. The auctions are expected to make the air waves more densely packed and companies had asked the government to consider ways to reduce this interference.
On switching between technologies, the new clause says that firms acquiring spectrum in the forthcoming auction “shall provide details of the technology proposed to be deployed for operation within one month of getting the license but only if the technology happens to be other than GSM, CDMA or LTE”.
The amendments made by the DoT are in response to as many as 276 queries raised by the telecom industry on the spectrum auctions.
The reserve price of radiowaves is expected to increase in the forthcoming bidding rounds by 1 per cent for ‘excess demand’ in case of every additional megahertz companies bid for, beyond the quantum put up for the bidding. In the earlier auctions, the increase in base price was linked to excess demand for every 1.25 MHz spectrum.
DoT also clarified that there will be no need for telecom operators like Uninor, Videocon, Sistema Shyam Teleservices, which had won spectrum bids in November 2012 and March 2013, to again submit performance bank guarantee (PBG).
As per the rule, PBG in prescribed format shall be submitted for Rs 35 crore by the ‘New Entrant’ and Rs 21 crore by ‘Existing Licensee’ per service area for a minimum period of six years before signing the license agreement.
The government is expecting a minimum of Rs 11,300 crore from the upcoming spectrum auction. It has set a revenue target of Rs 40,874.50 crore for this fiscal year from the auction, including auction amount, one-time spectrum charge and annual regular license fee.
About 403 MHz of 2G spectrum in the 1800 MHz band and about 45 MHz of spectrum in the premium 900 MHz band is being put up for auction.
DoT has also clarified that the spectrum can’t be mortgaged to raise funds but it will work to modify tri-partite agreement that was signed with banks to facilitate funding for upcoming auction.