For new licences, telecom returns to bidding. The department of telecommunications is moving away from the present policy of first-come-first-served basis. The DoT will also involve the finance ministry and Sebi to scrutinise the shareholding patterns and funding sources of all the 400-odd companies that have applied for the countrywide, 22-zone telecom licences.
The applicants include AT&T, Sterlite, a clutch of domestic telecom players and several real estate companies.
The new plan is a throwback to the practice that was prevalent in the late ?90s. The last bidding for licences took place in 2001 when a fourth service provider was inducted in telecom circles. A note prepared by the access service wing of the DoT says that due to a highly competitive scenario in the sector, there was a need to go in for bidding. There should be a reserve price for participating in the bidding process, equal to the present entry fee of Rs 1,500 crore. ?This will not only fetch more revenue to the government but will also be a very transparent process,? the note says.
To find out sources of funding of the applicants, both existing and new, their present shareholding pattern would be sent to the ministry of corporate affairs for its expert opinion, says the note. Sebi, the Reserve Bank of India and the finance ministry would also be involved in the process. Companies not involved in any litigation or have not defaulted with the government would be considered for bidding. If not, a company would have to give an undertaking that it would not get involved in litigation again on issues relating to telecom.
Bids will be considered only after applicants paying the reserve price. The lowest bidder will be eliminated in first two phases. But they would be given one last chance in the final stage chance to match the highest bidders.
The bidding would only be for licences and not spectrum because spectrum will come bundled with licences, depending on availability.
Companies may bid for either the GSM or the CDMA technology. If they want to bid for both, they have to submit separate requests in the bidding process. Besides, those that do not qualify would have the option of going in for wireline services, where no spectrum would be allowed.