Telecom dept to conduct fresh 2G spectrum auction by June

Will decide pricing of spectrum that failed to get bidders earlier in a month

The Department of Telecommunications (DoT) is planning to hold a fresh round of auctions of 2G spectrum in May or June this year.

The government needs to conduct the fresh round of auctions to comply with a Supreme Court order, in February, asking it to auction all airwaves that would be vacated after cancellation of 122 telecom licences.

The government has spectrum of 137 blocks, each of 1.25 MHz, in the 1,800 MHz band, 34 blocks, each of 1.25 MHz in the 900 MHz band and 37 blocks, each of 1.25 MHz in the 800 MHz CDMA band that can be auctioned.

According to a recent discussion, DoT’s immediate past secretary R Chandrashekhar had recommended that the DoT committee on allotment/ assignment of spectrum be asked to examine different aspects and prepare a draft report on the pricing of the spectrum, which failed to get bidders in the past two auctions in November and March, within a period of one month. The DoT is expected to act on the recommendation.

Chandrashekhar had also said the committee should be extended with six new members and the reconstituted Committee should be asked to examine the issues further.

According to the discussion, the draft report of the reconstituted Committee should be considered and finalised by the Committee that is currently finalising the details of the Unified Licensing (UL) Regime.

Based on their final report, the department would prepare the note for the Cabinet following approval from the Communications and Information Technology Minister Kapil Sibal.

The committee would take a decision on the pricing of spectrum identified for allotment/ assignment through auction but where market conditions have led to failure of auctions to result in price discovery.

The government failed to get bidders for 14 telecom service areas in the 800 MHz spectrum band in the March auction. On the other hand, no operators bid for the 1,800 MHz spectrum in the Delhi, Mumbai, Karnataka and Rajasthan circles in the November auction because of high reserve prices. Though the government had reduced the base prices for the four circles by 30 per cent for the March auction, it failed to get any bidder.

The DoT committee would also take a decision on the pricing for the Delhi, Mumbai and Kolkata service areas for 900 MHz spectrum band.

Further, the committee will have to finalise pricing of spectrum that cannot be discovered through auction, including cases of non-commercial usage, captive usage by commercial entities, usage for social purposes, such as community radio stations.

In November 2012, the government had earned Rs 9,407.64 crore by auctioning 1,800 MHz spectrum. Though the government had auctioned 176 blocks (1.25 MHz each) of the total 198 blocks in the November auction, it managed to get bidders for 101 blocks.

In March, the government got just Rs 3,639 crore from the auction of 800 MHz CDMA band where Sistema Shyam Teleservices was the lone bidder for eight circles. However, most of the money will not come to the government exchequer as it has to adjust the amount the companies had paid for their quashed licences, and most of the companies have opted to pay in deferred payment mode.