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DoT plans next auction round [Mail Today (India)]
[April 15, 2014]

DoT plans next auction round [Mail Today (India)]

(Mail Today (India) Via Acquire Media NewsEdge) 2,100 MHz of 3G spectrum and 800 MHz of CDMA to be auctioned AFTER the successful last round of 2G airwaves auctions this year, the Department of Telecommunications ( DoT) plans yet another round of bidding with 2,100 MHz of 3G spectrum and 800 MHz of CDMA airwaves post elections. The highest decision- making body of the telecom sector, the Telecom Commission ( TC), is expected to meet soon to kick- start the process for the next round of auctions.

Top government sources said that the TC will face uncertainties concerning auction of 3G and CDMA airwaves as telecom companies have added extra debt of ` 61,000 crore against spectrum they won in the February auction. The government will have to create a favourable environment for telecom companies like funding from banks, the sources said.

DoT has agreed to the finance ministry's view of classifying spectrum as a tangible asset through which telcos can raise debt by pledging spectrum as collateral. However, banks will have to be brought on board for a more liberal lending policy to make the auction a success.

A top official of a leading tele com company said that it would be difficult for the telecom companies to participate in auctions, at least, for one full year from now as most of them are piling up losses.

The cumulative debt of telecom companies touched ` 2.5 lakh crore as on March 2013.

Although telecom companies are yet to work out their financials, the debt is expected to rise to over ` 3.05 lakh crore by the end of March 2014.

The TC also faces hurdles from Telecom Regulatory Authority of India ( Trai), which wants auction 800 MHz of CDMA airwaves as extended GSM which can be used by GSM telecom operators as well due to lack or no demand of these airwaves by CDMA operators.

However, Russia's SSTL has opposed Trai pushing for extended GSM of 800 MHz.

It also wants major cut in base price of CDMA spectrum.

Another major hurdle comes from defence forces as a major chunk of spectrum fit for telecom services is held by it.

The defence forces have agreed to vacate the airwaves once an alternate communication network is put in place by the telecom ministry. Bharat Sanchar Nigam Limited is executing a project which is unlikely to meet the new deadline of mid- 2015.

Besides 3G and CDMA airwaves, almost 211.8 MHz of spectrum for 900 MHz and 1,800 MHz band will be put up for auction next year as licences of leading telcos will expire between December 2015 and April 2016.

In December, 2015, four licences of Bharti Airtel, seven each of Idea Cellular and Reliance Telecom and six of Vodafone must be renewed.

DoT will also approach Trai for its recommendations on auction of these airwaves.

Besides this, the most efficient 700 MHz band of spectrum is also being considered for auction next year, which would mean that the government would be expecting anywhere around ` 75,000 crore, said an official. DoT had put 385 MHz of airwaves in 1,800 MHz band 46 MHz in the 900 MHz band for auction in February.

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