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Spectrum auction may start in September at earliest

Last Updated: Thursday, July 19, 2012 - 23:11

New Delhi: The government is likely to issue the final document for auction of telecom spectrum on August 27, just four days before August 31 deadline set by the Supreme Court to complete the process.

Going by the schedule worked out so far by the Department of Telecom (DoT), the government is likely to miss the August 31 deadline for auction of spectrum freed from cancellation of 122 licences by the Supreme Court in February this year.

According to industry observers, airwaves bidding is expected to start, at earliest, only in September.

However, government is yet to approach the apex court for extension of the August 31 deadline.

An Empowered Group of Ministers (EGoM) headed by Home Minister P Chidambaram on July 18 is believed to have been apprised of the new date for the issue of Information Memorandum (IM), government sources said.

IM was previously to be issued on August 6 and was later deferred for August 22. Now, it is understood that the EGoM has been presented with August 27 as the new date.

The government will thus have only 4 days to complete 13 processes before actual bidding for airwaves starts, assuming that August 31 remains the final date.

The steps include responding to queries of potential bidders, inviting applications and giving time to companies for submissions, finalising eligible bidders, public information sessions and mock auction.

In a schedule proposed earlier, which was rejected by the Supreme Court, the government had sought to issue the IM by August 30. It had also indicated that it will require over 100 days after IM, before actual bidding starts.

This auction is important for companies like Sistema Shyam Teleservices, Uninor and Videocon whose licences were cancelled by the apex court but they are willing to continue their businesses by acquiring spectrum through auction.

Permits of these companies for telecom services is valid till September 7 only as per the Supreme Court order.

The auction process may stretch to October in case of aggressive bidding by companies, as happened in the case of last auction of airwaves which was held in 2010 for 3G and wireless broadband access (BWA) services.

The time taken for auction of airwaves for 3G and BWA was cumulatively 50 days. The 3G auction was completed in 34 days after completion of 183 rounds of bidding, while BWA auction took 16 days to end after 117 rounds of bidding.

The new schedule being proposed is largely due to delay in finalising the pricing of spectrum or airwaves.

The EGoM is scheduled to meet on Friday to take a view on spectrum price which may be referred to the Union Cabinet for final decision.


First Published: Thursday, July 19, 2012 - 23:11
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