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Combined auction for 2G likely

india Updated: Feb 15, 2012 09:30 IST
Manoj Gairola

The Telecom Regulatory Authority of India (TRAI) may club the auctioning of 2G telephony spectrum of incumbent operators and new entrants in a regime to be announced by communications minister Kapil Sibal on Wednesday. The minister is expected to announce the terms under which incumbent players will have to pay a price for the extra spectrum they are sitting on at prices to be determined by an auction.

The auction-based prices will be for the spectrum beyond the start-up quota of 6.2 Mhz for which they had paid at prices determined by auctions held in 2001.

TRAI is currently working on modalities for auction of the spectrum and licences for the new telecom operators. In its verdict on February 2 on alleged corruption in 2G spectrum allocation, the Supreme Court had cancelled their licences and asked TRAI to give its recommendations on the auction within two months.

If the minister announces that incumbent operators will have to pay for the excess spectrum (beyond 6.2 Mhz) at the market-linked prices, then the regulator may consider clubbing it with the process of auctioning spectrum for new operators, a senior government source said.

Sibal is expected to formally announce the delinking of spectrum from licences, the auction policy to determine the price for spectrum for incumbents and new players alike and a permission to allow the sharing of 2G spectrum between players.

Government sources said the minister will also announce that a nationwide service licence will be available for Rs 20 crore but that spectrum will have to be paid for. The new regime will also set revenue sharing with the government for operators at a uniform 8 per cent as against the current norm under which it is at 6% to 10% based on telecom circles.