Spectrum auction likely to be delayed beyond mid-September

The auction of 2G telecom spectrum could get delayed beyond mid-September and miss the Supreme Court (SC)-directed deadline, as a result of a decision taken by the Empowered Group of Ministers (EGoM) on Tuesday.

The EGoM under Home Minister P Chidambaram has decided to postpone a decision on imposing a one-time fee based on the upcoming auction price on incumbent operators for their current spectrum till mid-September, to be taken up only after the outcome of the Presidential reference being heard in the SC.

However, the SC had earlier said the 2G auction had to be completed by August 31. The attorney general, who was asked to give his opinion on the spectrum pricing issue in the EGoM, opined it would be appropriate to wait for the outcome in the SC hearing. The EGoM, therefore, decided that the issues, including pricing of contracted spectrum, excess spectrum and prospective pricing could be revisited after evaluating further developments on the SC proceedings.

However, the department of telecommunications (DoT), in its presentation to the EGoM the same day on this issue, said how much incumbent operators would have to pay for their contracted or excess spectrum had to be decided before the auction proceeded. Primarily, as they must “know the full implications for them and their competitors”.

The operators have also made it clear they must know how much they have to fork out for their existing spectrum before they can take a final decision as to whether they will bid in the auction or not.

Otherwise, they could take up the matter in the courts, as it would be against the principle of a “level playing field”.

DoT has offered options on the way incumbent operators could be charged for their existing spectrum. These include imposition of charges prospectively for all spectrum beyond 6.2 MHz or charging retrospectively beyond 6.2 MHz. It has also floated an option of charging for spectrum prospectively, beyond the initial 4.4 MHz. However, an earlier proposal which gave leeway to operators not to pay for spectrum at all has been scrapped.