DoT plays safe, to send 3G note to cabinet secy

The Department of Telecommunications (DoT) will send a note on higher annual 3G spectrum charge and the number of blocks to be put up for 3G auction to the cabinet secretariat for a possible discussion by the Cabinet Committee on Economic Affairs (CCEA). The note is expected to be sent by Tuesday.

A senior official of the DoT said the decision was taken at the Telecom Commission meeting on Friday (December 19). This, he said, was being done as a precaution in view of the allegations during the allocation of 2G licences and spectrum.

By Tuesday, the note should go for a possible discussion at the CCEA whenever it meets, the official said, adding that the Cabinet was the authority to decide if this was a departmental matter or it should be put on the agenda of the CCEA.

The official said though the auction of 3G spectrum was a pure telecom issue, Communications Minister A Raja wanted the CCEA to take it up for larger participation by ministries. The official said the document also pointed to the commission’s decision to reject the Telecom Regulatory Authority of India’s (Trai’s) suggestion for 2 per cent (of the highest 3G auction bid in a circle) charge on the premise that it would lower the amount the players would bid.

The CCEA note also focuses on the DoT’s proposal of a maximum of five 3G players in a circle, including one PSU player. The Telecom Commission had on Friday rejected Trai’s proposal to keep open the option for more players in future.

Earlier this month, Trai had approved a government proposal to increase the annual spectrum charge for “standalone” 3G operators to 3 per cent of their revenue. According to the new formula, 2G operators who also become 3G players will have to pay 3-8 per cent depending on the level of spectrum they have.

This matter has also been included in the DoT note to the CCEA. For the 3G spectrum auction, scheduled for January 16, the DoT will hold the pre-bid conference on December 23 and start receiving applications from December 26. The pan-Indian reserve price for 3G spectrum is Rs 2,020 crore.