A year and a half after it raised over R1 lakh crore through 3G spectrum auctions, the government is dipping into the wireless pool yet again, this time 4G spectrum in the 700 MHz band. Besides ushering in blazing fast data speeds, the move could also help raise non-tax revenues for the cash-strapped government. The auctions may be completed in 2012-13.
An internal note of the department of telecommunications (DoT) said that the quantum, schedule and mechanism of the 4G spectrum auctions would be finalised by April 15. The DoT will then submit the proposal to the empowered group of ministers for ratification.
Sources said the DoT will soon write to the telecom regulator seeking its recommendations on the reserve price, quantity of spectrum to be auctioned and eligibility criteria. Separately, the DoT will select the auctioneer.
The note penned by the joint wireless advisor GK Agarwal has tasked the Wireless Planning commission with communicating with the ministry of information and broadcasting (I&B) and taking over spectrum in the contentious 698-806 MHz band or the 700 MHz band. This band has long been in the middle a tug of war between the I&B ministry and DoT, with the latter repeatedly requesting the former to vacate the band.
However, in spite of the National Frequency Allocation Plan 2011 prepared by the Wireless and Planning Wing of DoT bracketing the spectrum in this band for the telecom services, the I&B ministry has refused to part with it, claiming instead that the spectrum in this band has been assigned to it.
Although there is no official word, the size of the auction proceeds will depend on many variables including the state of the economy. Industry analysts believe the bidding for 4G spectrum will be as aggressive as that for 3G spectrum.
Fourth-generation spectrum requires fewer base transceiver stations to be put up compared with spectrum in higher bands of 800 Mhz, 900 Mhz and most of the 1,800 MHz band spectrum, where maximum amounts have been allocated so far. Such efficiency is of significant interest among telecom players, and the auction could help the government swell its coffers.
?Considering that the government would reserve some minimum amount of spectrum for public sector telecos BSNL and MTNL, there would be a total of 2X30 MHz spectrum available for auction. Out of this, if the government divides it into the maximum possible number of companies, there would be at least three slots per country. So, once again, we have just three slots but the spectrum being auctioned is much more efficient than the 3G spectrum,? an industry expert said.
