DoT invites bids to conduct 3G spectrum auction

Amid its differences with the Ministry of Finance, the Department of Telecommunications (DoT) today started the process for 3G mobile services and invited bids from Indian and foreign companies to conduct the auctioning of spectrum in 22 telecom service areas.

Issuing the Request for Proposal (RFP), the DoT has convened a pre-bid conference on August 27 and will open the financial bids, of those who qualify technically and meet all the criteria for selection, on September 19.

According to the eligibility criteria, the bidder shall not have any equity directly or indirectly in any telecom or Internet service provider (ISP) in India. Similarly, any telecom company or ISP shall not have any stake in the bidder company.

The DoT’s decision to issue an RFP comes amid a tussle between it and the finance ministry over 3G services guidelines and both have exchanged communications in this regard.

Last week, Communication and IT Minister A Raja had said the finance ministry was consulted on all the financial implications relating to 3G spectrum pricing and they (finance ministry) also nominated their representative in the joint committee that would oversee the auctioning of the radio frequency.

Raja had said there would be no deviation in the schedule for the auction of spectrum and rollout of services.

The companies applying for spectrum auctioning need to be registered under the Indian Companies Act or a foreign company incorporated in a country outside India or a joint venture of such companies.

The DoT has, however, set a tough condition that the bidder company should have the experience of conducting at least five e-auctions in the last three years and the total value of all e-auctions conducted should be at least Rs 2,500 crore.

The prospective bidders shall deposit a non-refundable processing fee of Rs 50,000 and the firm must have a minimum paid-up capital of Rs 10 crore and a net worth of Rs 25 crore or equivalent on the date of application. The DoT will accept the applications till September 2.

The DoT plans to start 3G mobile services by early next year and has already allotted the frequency to two PSUs — BSNL and MTNL — which have started the process of installing networks in their respective service areas.

The government hopes to garner nearly Rs 40,000 crore from the auctioning of spectrum for 3G services among domestic players like Bharti Airtel, Vodafone, Idea and a host of new mobile operators and foreign players.