The telecom department is planning to give some bands of spectrum to mobile players through administrative allotment instead of the market-based auction process. A committee under the department of telecom is studying conditions for which administrative allotment of spectrum should be treated as a norm.
The government appointed committee on spectrum has also been asked to work out “conditions” that needs to be finalised before adopting auction as the preferred mode of allotting spectrum.
Last month, telecom minister Kapil Sibal had said adopting auction route every time for allocating spectrum “does not make sense”. The Supreme Court, while giving its opinion on queries raised by the Government through a Presidential Reference, had also said that auction is not the only way to allocate natural resources.
The last spectrum allocation through administrative process for mobile telephony was done in 2008. It was put on hold after Supreme Court judgement of February 2, 2012 which cancelled 122 2G telecom licences and asked government to allocate the spectrum through auction.
The scope of the committee, which is looking into allotment and pricing of spectrum, has been expanded to deal with requests for assignment of spectrum by existing licences that cannot be dealt through normal auction process.
“Assignment of odd quantities of spectrum to make up multiples of 5 Mhz required for deployment of modern technologies e.g. 4.4 Mhz to 5 Mhz keeping in view the advent of liberalised spectrum regime,” needs to be decided by the spectrum committee, said a department of telecom (DoT) internal note.
The note added that administrative allotment of spectrum up to the prescribed limit at the time of renewal of a licence also needs to be looked into. It will also study the scope and limitations of applicability of an auction determined price for spectrum.
In cases where market conditions have failed to result in price discovery, the panel is expected to figure out pricing of such radiowaves.
The November 2012 2G auctions ended flat with the government earning Rs 9,408 crore less than one-fourth of targeted Rs 40,000 crore since operators stated that the prices was very high. Only half of 290 Mhz put up for sale got bids.
Despite the government slashing reserve price in March this year by 30% to Rs 10,000 crore for 5Mhz there were no takers for GSM spectrum in an auction held in the same month.
