DoT to auction 71 blocks across 22 circles

The Department of Telecommunications (DoT) will auction 71 blocks of 5 Mhz each under the proposed 3G spectrum allocation in the country.

In Delhi circle, only 2 blocks will come under the hammer and operators expect fierce competition. The licencor will also auction 3G and Broadband Wireless Access (BWA) spectrum under two separate and distinct processes.

The DoT has identified 2 blocks for auction in Delhi, and four each in Mumbai, Kolkata and Maharashtra. Four blocks will be auctioned in other circles like Andra Pradesh, Karnataka, Kerala, Punjab, Madhya Pradesh and Tamil Nadu (including Chennai) among others, DoT said in information memorandum issued today.

While Uttar Pradesh (west) and Himachal Pradesh has been given three blocks and West Bengal one block, the remaining circles have either 4 blocks or two blocks. A circle with 2 blocks means that DoT will only permit two companies to operate 3G services in that service area. Of course one block has already been reserved for MTNL and BSNL in each circle.

The information memorandum supplements and updates the guidelines that were issued by DoT on August 1, 2008, and amendments to it on September 11, 2008.

The licencor has also announced the reserve price – for example Rs 160 crore for Mumbai, Delhi and Maharashtra – and DoT will provide 2.1 GHz for 3G operations.

The DoT will award 3G and BWA spectrum under two separate and distinct processes, under a two-stage simultaneous ascending e-auction (over the internet). Prior to the auction, pre-qualified bidders will be issued with authentication tokens to allow secure access to the process.

The licencor will provide 2.3 GHz and 2.5 GHz bands to support BWA operations in the country.

The DoT is also relaxing External Commercial Borrowing guidelines to permit borrowing up to $500 million to finance spectrum acquisition fees.

Under an attempt to allow new entrants take part in the auctions, DoT is permitting companies to apply for Universal Access Service Licence (UASL) – the approval for operating mobile services – after winning spectrum.

Foreign players with experience in 3G services would also be permitted to bid for spectrum, provided they then transfer it to an Indian subsidiary.

The DoT is also in the process of announcing the Mobile Virtual Network Operator (MVNO) policy “shortly”, it said.