Brazil on track to India's 3G auction course

India’s controversial 3G auction has attracted the attention from some very unusual quarters.

The Brazilian government, which is also planning to hold an auction of 3G broadband wireless spectrum, has communicated to the Department of Telecommunications (DoT) that it would like to know more about the e-auction method that would be used by India.

“The talks are at a preliminary stage. They (Brazil) have expressed their interest in our e-auction process,” a senior DoT official told Business Standard on the condition of anonymity.

The auction of 3G, the airwaves which enable high-speed interent and broadband wireless access (BWA), will be held in India from April 9. DoT is set to use an e-auction method that would allow prospective bidders to access the platform using a standard web browser.

Brazil had taken the 3G route in 2007, where Vivo Participacoes, Claro, TIM and Tele Norte Leste Participacoes were the winners and remain the leading 3G providers in Brazil. The country now expects to auction the rights for around 44 licences for 3G broadband wireless (like our BWA) operators by June this year, according to reports.

Considering Brazil and India are both developing markets that have experienced high growth rate in the mobile population, the two markets have lots of similarities.

DoT has selected NM Rothschild & Sons (India) and DotEcon as the two auctioneers. The auction would be conducted in two stages via internet. To begin with, the clock stage would allow the bidders to participate for all slots and then finalise the bidders who would be awarded a block in each of the service areas, where at least one block would be available for auction.

The clock stage would be followed by a frequency identification stage, which would identify specific frequencies available to the winning bidders. The frequencies identified will be announced simultaneously with the outcome of the auction. The entire auction process would be conducted online.

However, telecom anaylst Mahesh Uppal says this is not the first time that an e-auction is being held in a country. “E-auctions are always a more transparent and foolproof method of conducting auctions,” says Uppal.