Auction 3G spectrum to only 4 operators, DoT tells EGoM

In a new twist to the controversy over spectrum auctions for 3G or third-generation telecom services, the Department of Telecommunications (DoT) has offered another alternative to the Empowered Group of Ministers (EGoM) at its first meeting today: auction all the spectrum available in one go but limit the number of operators to four.

The government currently has 3G spectrum (the radio frequencies that enable mobile telephony) between 5 MHz and 60 MHz depending on the service area.

An earlier formula set out by the Telecom Regulatory Authority of India (Trai), accepted by DoT, agreed on each operator to be given only 5 MHz, implying the government had sufficient spectrum for up to 12 operators per circle.

However, the debate was whether only four operators be given 5MHz or whether the entire spectrum should be auctioned in blocks of 5 MHz.

In a presentation to the EGoM today, DoT also offered another alternative: the government could auction more than four blocks of spectrum but will not exhaust all available spectrum.

The EGoM, headed by Pranab Mukherjee, has been mandated to fix the amount of 3G spectrum to be auctioned and also set up a reserve price for auction, an issue that has attracted considerable debate.

The presentation also set out a timetable, with a recommendation that the spectrum auction should begin within 75 days of a final decision on the subject. Auctions were originally scheduled for the end of last year but were postponed owing to controversies. Revenues from the auctions are critical for the government, which is facing a record fiscal deficit this year owing to stimulus packages and other welfare expenditure.