More spectrum on the block: DoT may auction over 400MHz in 1800MHz band

The Department of Telecommunications (DoT), which has decided to auction the maximum available quantity of spectrum in January 2014, is likely to put more than 400MHz of airwaves on the block for commercial use.

While the DoT, in its submission to the Telecom Regulatory Authority of India (Trai), had stated that it wants to auction 285MHz of spectrum in 1800MHz band that could not attract bidders in the previous two auctions, the telecom department has identified some additional spectrum that can also be allocated for commercial use by private cellular operators.

While it is negotiating with the Ministry of Defence to get some spectrum vacated for commercial use, it may not get the same soon.

On the other hand, the DoT had kept aside some spectrum for the refarming of 900MHz spectrum band, as the initial proposal was to reserve 2.5MHz spectrum in each circle for each of the existing 900-MHz spectrum holders whose airwaves will be refarmed.

According to the Trai data, 35 licences in 900MHz band in 21 circles will be due for renewal between 2014 and 2016.
As the Government has decided to abolish reservation for refarming, an additional quantum of 87.5MHz spectrum in 1800MHz band will be available that can be auctioned in January. Besides, 27.8MHz of spectrum in 1800MHz band is with 15 licencees, whose licences will be due for renewal between 2015 and 2016, have 27.8MHz of spectrum in non-metro circles, which can also be auctioned.

“The Government has some additional spectrum which would be put on auction in January. We are working on the details,” said a top DoT official. Once DoT readies the details, the matter will be forwarded to the Empowered Group of Ministers (EGoM) on telecom headed by Finance Minister P Chidambaram for formal approval.

However, the quantum may increase if the Ministry of Defence agrees to vacate any spectrum for commercial use for private cellular operators.

In January, the DoT will conduct auction for 900MHz band only in Delhi, Mumbai and Kolkata circles, as licences in these three circles will be due for renewal in November 2014.

Priority allocation

To ensure the success of the upcoming auction, the DoT has decided to give preference to the aggressive bidders in allocation of spectrum. So, chances are there that companies, who will bid aggressively in the auction, will get contiguous spectrum depending on availability, according to a top DoT official, adding that this would encourage aggressive bidding in the auction.

Meanwhile, the DoT has also decided to abolish the option to withdrawal of bids in the forthcoming auction. In the previous auctions, successful bidders were given the option to withdraw their bids if they do not get contiguous 5MHz spectrum.

The decision has come considering the fact that the Government does not have contiguous 5MHz spectrum in 1800MHz band in most of the circles.

Earlier, DoT secretary M F Farooqui had said the government had set a target to garner more than Rs 11,300 crore from the auction of radiowaves in three bands — 1,800 MHz, 900 MHz and 800 MHz. The government needs to conduct the auction to comply with an order by the Supreme Court.

In November last year, the government could earn only Rs 9,407.64 crore by auctioning 1,800 MHz spectrum. Although the government had auctioned 176 blocks (1.25MHz each) of the total 198 blocks in the November auction, it managed to get bidders for 101 blocks.