New Rules set for spectrum for all telecom companies chases!!

New Delhi: More companies in the telecom arena that should further spur competition and benefit consumers.

The government’s guidelines for spectrum auction that were released today have allowed new foreign as well as domestic companies to bid for airwaves, apart from the incumbent operators and companies that lost their licences under the Supreme Court verdict. The auction is scheduled for later this year.

The guidelines issued by the department of telecom (DoT) state that entities that can bid for spectrum in the 1800 and 800 megahertz bands include those who fulfil the eligibility for obtaining a unified licence, apart from current licence holders.

Under the new telecom policy, which will be enforced soon, eligible entities can buy a unified licence for Rs 15 crore, which allows them to provide any service — mobile, landline, long distance services or broadband (Internet) — using any band of spectrum.

“It appears that the government is indicating that it wants to keep the auction open for any new interested party that plans to enter the telecom sector through a unified licence,” Hemant Joshi, telecom expert at consultancy firm Deloitte, told The Telegraph. Rules for a unified licence will be issued separately.

“Companies whose licences were quashed under the direction of the Supreme Court will be treated as new entrants,” the guidelines said.

In its February verdict, the apex court cancelled 122 licences, including those of Norway’s Telenor and Russia’s Sistema. These firms can operate till September, and the government has been ordered to auction new spectrum and licences by August-end.

Some of the objectives of the auction as specified in the guidelines include: obtain a market-determined price of spectrum, stimulate competition and maximise revenue proceeds.

“With revenue maximisation being one of the objectives of the sale, increased participation by new players will be essential,” said an industry expert.

However, he added that without a pricing policy, interested entities would find it difficult to build a business case. The government wants to garner around Rs 50,000 crore from the auction of spectrum.

According to the guidelines, “The reserve price, terms of payment and annual spectrum use charges will be announced separately.”

While Trai has proposed a reserve price of Rs 18,000 crore for 5MHz of pan-India spectrum, industry players have threatened to quit the auction if these high prices were approved.

A nine-panel empowered group of ministers (eGoM) on spectrum has been set up to finalise the contentious issue of airwave pricing. However, after former finance minister Pranab Mukherjee resigned as chairman of the eGoM, it has not been reconstituted.

In the 1800 band (used by GSM operators), a minimum of eight blocks each of 1.25 MHz will be put up for auction in all the service areas. “In addition, a provision may also be made to make available another three blocks of 1.25 MHz to meet the requirement of new entrants,” said the guideline.

While existing operators will be permitted to bid for a maximum of two blocks of 1.25 MHz each, new entrants will be required to bid for a minimum of 4 blocks, which can go upto 5 blocks of 1.25 MHz each. For CDMA operators, three blocks of 1.25 MHz in the 800 MHz band will be put up for sale.

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