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DoT Modifies Spectrum Auction Terms; Waves May Get Costlier

teleNEW DELHI: In response to 276 queries raised by the telecom industry on spectrum auctions slated for the next month, the DoT has made about 24 changes to various terms, including a rule that may make radiowaves costlier.


The changes are also expected to facilitate faster rollout of 4G technology networks. As per the notice issued for the auctions, slated for February 3, telecom firms were required to provide information regarding any new technology they wanted to deploy one year before starting trials. This did not cover 2G (GSM and CDMA) or 3G technologies.


The new clause now reads that the company acquiring spectrum in the forthcoming auctions “shall provide details of the technology proposed to be deployed for operation…within one month of obtaining the license, if the technology happens to be other than GSM/WCDMA (3G)/LTE (4G)”. The new amendments will also put more load on bidders compared to the previous auction.


The reserve price of radiowaves is expected to increase in the forthcoming bidding rounds by 1% for ‘excess demand’ in case of every additional megahertz companies bid for beyond the quantum put up for the bidding.


In the earlier auctions, the increase in base price was linked to excess demand for every 1.25 Mhz spectrum.


DoT also clarified that there will be no need for telecom operators like Uninor, Videocon, Sistema Shyam Teleservices, which had won spectrum bids in November 2012 and March 2013, to again submit performance bank guarantee.


As per the rule, PBG in prescribed format shall be submitted for R35 crore by the ‘New Entrant’ and R21 crore by ‘Existing Licensee’ per service area for a minimum period of six years before signing the licence agreement. The government is expecting a minimum of R11,300 crore from the upcoming spectrum auctions.

(Source: The Financial Express, January 4, 2014)


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