Auction Guidelines Sweep Key Issues Under The Carpet

The Department of Telecommunications has finally released the guidelines for auction and allotment of spectrum in the 1800-MHz and 800-MHz bands, but unfortunately the guidelines do not address the key issues that need to be resolved before the auction.

The guidelines do not throw any light either on the reserve price that the operators need to pay, or on the rollout obligations and annual charges that will be levied on the operators.

1800-MHz and 800-MHz spectrum will be auctioned first through a multiple-round ascending e-auction process. This spectrum will be liberalized enabling the operators to offer any services on them and the spectrum will be awarded for a 20-year period.

Regarding conversion of existing spectrum to liberalized spectrum, the guidelines say that "service providers may be allowed to convert their existing 1800-MHz spectrum to liberalized spectrum for a period of 20 years on a payment of auction determined price." This would be subject to the licensee acquiring Unified License on expiry of the existing license. The guidelines make no mention whether telecom operators will have the option of liberalizing their spectrum or will it be mandatory.

The guidelines are far from being comprehensive which is why it will not be a surprise if the auctions are not held in the given timeline. The decision on key factors is critical before the auctions take place but the government wants to maintain the status quo. (See The Ghost Of 2G and IndiaWatch: EGoM Tackles Spectrum Pricing.)

Gagandeep Kaur, Editor, Light Reading India