DoT sets the stage for spectrum auctions

  • M Rajendran, Hindustan Times, New Delhi
  • Updated: Jul 08, 2014 23:27 IST

The department of telecommunications (DoT) has prepared a roadmap for auctioning radiowaves to existing and new telecom operators for the next five years, though it refuses to indicate the revenue it expects to mop up from the exercise.

Spectrum auctions would be made in the 800, 900, 2,100, 2,300 megahertz (MHz) bands (which would include 2G, 3G, 4G and 3G Plus services). Spectrum is a range of frequencies which mobile devices use to send and receive data including voice.

“DoT will seek recommendations from (telecom regulator) Trai to set a base price for the auction,” a source in the communications ministry said.

“The role of Trai in suggesting reserve price is important, but, the government has to take care of its social objective and spectrum being a scarce resource, a balance has to be achieved, which is what we plan to do,” a senior official in the ministry told HT.

With many licence renewals coming up in the next three years, the demand for spectrum from existing operators is bound to increase. To maintain continuity in services, they will have no option but to pay for the spectrum in the same band in which they are operating.

If they wish to offer high speed digital services, they will have to bid for additional spectrum as these services require a higher band of frequencies.

Globally, spectrum auctions are cash cows for governments, and India is no different. “The government has a clear annual road map of revenue accrual from the spectrum sale till 2032 and with usage of data services set to increase, the revenue will only grow,” said Jaideep Ghosh, partner, KPMG Advisory Services.

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