3G spectrum to be auctioned

The Department of Telecommunications (DoT) has decided to go in for open auction of spectrum for 3G services "" mobile services that provide high-speed data internet to users.

Communications Minister A Raja also said three operators are initially expected to be given spectrum of up to 10 MHz each and both 2G operators (operators of current services) and new players (including foreign companies) can bid for 3G spectrum in the 2.1 GHz band.

Should the government want to accommodate more players it could reduce the spectrum available to each player

The 3G auction will take place through an e""auction conducted by a specialised agency. The lowest bid will become the base price for the subsequent round of bidding for the remaining players.

Accepting Telecom Regulatory Authority of India (Trai) recommendations in September last year, DoT has put in some stiff conditions.

Mergers will not be allowed during the initial five years among the operators, nor will reselling or trading spectrum. Operators also have to meet stiff roll-out obligations including rural obligations or face penalties.

Besides the initial one-time spectrum, successful operators will also have to pay an additional spectrum charge of 0.5 per cent of revenue, which will be increased to 1 per cent after three years.

Mobile service providers of CDMA technology can also avail of 1.25 MHz of spectrum still available in the 800 MHz band (in which only CDMA services can operate) to offer 3G services at an amount proportionate to the highest bid for spectrum in the 2.1 GHz band.

DoT also issued guidelines to boost broadband wireless services (or Wimax). Under this, each service provider will be allotted 10 MHz, again through open auction in the 2.5 GHz band.

The base price for the auction would be 25 per cent of the amount for 3G spectrum.