The Hindu Business Line : DoT pushes for auction of GSM spectrum

The Option list
Continue with existing first-come first-served policy.
Invite bids for licences with an assured spectrum range.
Issue Letter of Intent for licences to those eligible and conduct auction.

Thomas K. Thomas

New Delhi, Oct. 26 Reliance Communication, Tata Teleservices and other CDMA players who want to offer dual technology may have to fight it out with the other 46 new applicants for GSM spectrum.

The Department of Telecom has told the Ministry of Communication that auction of spectrum or telecom licence would be the most transparent and legally tenable option to process more than 576 applications requesting permission to roll telecom services.

In a note sent to the Communication Minister, Mr A. Raja, on Thursday, DoT has presented three different options to deal with the large number of applications for telecom licence and said that in case the Ministry decides to go for an auction then all those companies wanting to offer dual technologies may be asked to participate in the competitive bidding process.

Entry fee

It said that spectrum may not be released at a later date if they did not take part in the auction. DoT said that to make the playing field level, all new applicants interested to participate in the bidding process may be asked to pay Rs 1,650 crore as the entry fee, for a pan India licence, to be eligible for the auction.

Though DoT has also said that the Ministry may choose to continue with the existing first-come-first-served policy, it has said that auctioning the spectrum or the licence would also bring in additional revenue to the national exchequer apart from making the process more acceptable to various stakeholders.

DoT has suggested that the bids can be invited either for the telecom licence or for spectrum. In both cases applicants will be asked to pay a fee for qualifying though the fee will be refunded to those companies who fail to win the bid in case licences are auctioned.

The Minister will take the final decision after consultation with the Solicitor General.

If the Ministry decides to continue with the existing policy of first-come-first-served, then Reliance will be among the first to get the spectrum. Existing GSM operators have already gone to telecom tribunal against such a possibility.

However, if the Ministry decides to go for auction then it gives all the 46 applicants a fair chance to get into the telecom sector.

Those in line include AT&T, Sistema, Videocon, Unitech, DLF, Hindujas, Moser Baer and Sterlite.

DoT said that in any case only those companies which fulfil all eligibility criteria, including those related to ownership and cross holding, will be allowed to take a licence.