Freeze 2G spectrum, first conclude 3G auction: FinMin

The Ministry of Finance has asked the Department of Telecommunications to stop any fresh allocation of additional 2G spectrum until a final view is taken on the recommendations of the committee on allocation of Access (GSM/CDMA) spectrum and pricing.

The ministry has also made clear that keeping in view the proposed indexation of the 2G spectrum prices  to  the derived price of 3G – as recommended by the committee — it is necessary to urgently conclude the process of 3G auction before giving effect to the report’s recommendations. 

The committee had recommended a complete junking of the existing subscriber-based criterion for additional spectrum allocation and wanted that spectrum beyond 4.4 Mhz should be auctioned.  The recommendations have been sent by the DOT to the Telecom Regulatory Authority Of India (Trai) for their view.

The finance ministry move essentially means that operators who have been looking for additional spectrum beyond 4.4 Mhz in  various circles might have to wait till around the end of the year, when the 3G auctions are expected to be concluded, before additional spectrum based on a new formula is given out. The move is expected to impact most of the older operators like Aircel and Vodafone-Essar, as well as newer operators like Reliance Communications, which have asked for additional spectrum.