DoT seeks 3-G auction extension

Written by Rishi Raj | New Delhi, Oct 17 | Updated: Oct 18 2008, 05:32am hrs
Despite the finance ministry categorically asking the department of telecommunications (DoT) to meet the December 2008 deadline for completing the 3-G auction, the DoT has expressed its inability to do so and instead provided an alternate calendar proposing to complete the process by mid-January and the reserve price would be paid only by January 25.

According to sources, the DoT has drawn a timetable wherein the auction would be concluded on January 15 and the final approval and signing of the contracts would be completed by January 25. An independent agency NM Rothschild has already been selected to advise the DoT to implement the auction procedure.

The DoT feels that in order to get maximum revenue from the auction and have a clutch of international telecom giants also participate in it, December wouldnt be a suitable time since the last fortnight would be holiday season globally. Hence the mid-January deadline has been decided.

Also an inter-ministerial committee with representations from the DoT, department of economic affairs (DEA) in the finance ministry, department of industrial policy and promotion (DIPP) and IT has been set up to interact with the auctioneer as well to supervise the design and the conduct of the auction.

The DoT is also facing spectrum crunch in 3G and is asking defence to release more spectrum. As many as 5 blocks in the 2 Mhz each in the 2.1 Ghz band spectrum for 3G services and 2 blocks each of the 20 Mhz in the 2.3 and 2.5 Ghz band for broadband wireless access (BWA) services are to be auctioned. However, in the 2.1 Ghz band there is a deficiency of spectrum in nine out of the 22 circles and similar problems plague he 2.5 Ghz band.

According to the timeline drawn, the consultation with stakeholders, auction design, preparation of the bid document, design of the auction site by the agency in consultation with the inter-ministerial committee would take place by December 15, after which scrutiny of applications, issue of information memorandum to qualified bidders and training to bidders on the auction software would end on December 31.

The DEA had earlier written to DoT for making an amendment to the 3G policy, which entails levying of a 1% spectrum fee on the incremental revenue arising out of the 3G services, saying that segregating revenue arising out of 2G and the 3G was not feasible. It had asked the DoT to solve all outstanding issues regarding the 3G spectrum roll out by December 2008 only.