Govt panel for incentive based pay to spectrum auctioneer

The government should not give a fixed fee of Rs 5 crore to an agency for conducting spectrum auctions but pay only if the radiowaves are sold at prices higher than the base rate, a ministerial panel has suggested, sources said.
"Inter-ministerial committee (IMC) on spectrum auction has recommended that payment would be made to the auctioneer only for a successful auction with respect to a particular service area. Only percentage of difference between reserve price and spectrum winning price will be paid," an official said.
The Department of Telecom is working on modalities for next round of spectrum auction for which it needs to appoint an agency that will design software and operate whole auction process which is conducted online.

The department selects auctioneer through tender process.
Earlier auctions had provision of paying fixed fee of Rs 5 crore along with variable fee quoted by the auctioneer.
The 3G and BWA auctions in 2010 which jointly fetched government about Rs 1 lakh crore were conducted by N M Rothschild & Sons.

DoT shortlisted the Times Internet Ltd consortium for auctions in 2012 which was mainly operated by Ahmedabad based firm e-Procurement Technologies.
The Times Internet led consortium did not demand any variable fee and worked only for fix fee of Rs 5 crore.
The consortium operated November 2012 auction which fetched bids of about Rs 9,100 crore, March 2013 auction fetched about Rs 3,600 crore and February 2014 auctions fetched about Rs 62,162 crore.

November 2012 auction saw price increase from reserve rates only in Bihar service area, while in rest of the 21 circles spectrum was purchased at base price only. In March, all spectrum was purchased at reserve price as their was only one bidder - Sistema Shyam Teleservices.
Auction conducted in February 2014 saw huge rise in value of telecom radiowaves. Companies purchased spectrum at premium of about 100 per cent in some service area.
IMC is of the view that variable fee payment clause will motivate auctioneer to design auction in a manner that brings good price for spectrum.
The recommendation of IMC are required to be approved by the Telecom Ministry.