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3G spectrum auction plan in last lap

business Updated: Jul 11, 2007 02:16 IST
M Rajendran
M Rajendran
Hindustan Times
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Spectrum for third-generation telecom services in the 2.1 GigaHertz band are likely to be offered only to two private service providers, besides Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd, with a reserve price of Rs 160 crore for Delhi and Mumbai.

According to a Department of Telecommunications (DoT) committee set up to examine the recommendations of the Telecom Regulatory Authority of India (TRAI) on auctioning radio frequencies for telecom services that allow high-speed internet and video streaming, all three service providers should pay the same fee — the highest bid.

For the initial one-time spectrum charge, an online auction is to be conducted by a specialised agency for selecting the two service providers, other than BSNL and MTNL. No trading or reselling of spectrum is to be allowed.

Initially, 2x10 MegaHertz spectrum is to be allowed to each of the three service providers, on terms to be set by the government.

The TRAI had submitted its recommendations on spectrum allocation for 3G services to the DoT in September 2006. A committee set up in the DoT to examine them submitted its report to the Telecom Commission last week.

The committee has also endorsed the TRAI’s view that the allotment of 3G spectrum should be treated as a standalone allotment, separate from the present 2G services both for the global system for mobile communications (GSM) and code division multiple access (CDMA) platforms, the two technologies used in mobile telephony.

Besides the initial, one-time spectrum charge, it has recommended that the successful bidders should pay an additional 0.5 per cent of their total adjusted gross revenue as a recurring annual charge, going up to 1 per cent three years after assignment.

Further, the committee has said no mergers will be allowed for companies that get 3G Spectrum for a period of five years.