NEW DELHI: The panel of ministers headed by Finance Minister Pranab Mukherjee on Tuesday decided to sell up to 13.75 MHz of spectrum in the 1800 MHz band in the upcoming auctions, raising the possibility of two mobile phone companies winning back their cancelled permits.
The nine-member Empowered Group of Ministers (EGoM) did not take a decision on the reserve price for spectrum that will be sold in the auctions, but decided to stick to the Supreme Court-mandated August 31 deadline to complete the sale process, said two officials.
It also decided that airwaves allotted in this auction will be technology-neutral, and it will be up to the winner to decide whether it wants to offer 2G, 3G or 4G services on these frequencies.
An official present at the meeting said the controversial proposal to refarm or redistribute the 900 MHz spectrum of existing operators was not discussed.
These airwaves are primarily held by Bharti Airtel, Vodafone and Idea Cellular, and are considered ideal for operating second-generation, or 2G, networks. The Empowered Group of Ministers is slated to meet again this month to finalise the minimum price for spectrum.
Department of Telecommunications (DoT) officials said the panel could not take a decision on the reserve price as sector regulator Trai had not submitted its inputs.
DoT had asked the regulator to study the impact of high spectrum costs on consumers, mobile phone companies and government revenues, and submit its findings to the EGoM before Tuesday’s meeting.
The Supreme Court had quashed licences of nine operators in February and directed the government to issue fresh permits through an auction process.
The EGoM will finalise the modalities of the auctions, which have become a subject of intense controversy because of sector regulator Trai’s recommendations on the minimum auction price as well as the redistribution of spectrum.
“A minimum of 10 MHz of airwaves will be sold in all 22 circles. But, there is a provision to add another 3.75 MHz in each region based on demand.
Airwaves will be sold in blocks of 1.25 MHz each and, therefore, a total of 8-11 blocks will be on sale,” an official who was present at the meeting told ET on condition on anonymity.
The government can garner a minimum of Rs 49,800 crore if 13.75 MHz of airwaves are sold at the price recommended by Trai.
In addition to companies such as Telenor, Sistema and Loop, whose licences were cancelled by the Supreme Court, the panel of ministers has also agreed to let existing operators as well as new entrants participate in the auctions.
The official quoted earlier said new entrants and telcos whose licences were cancelled by the SC could bid for a maximum of four blocks (5 MHz) while existing operators such as Bharti Airtel and Vodafone and dual-technology players like Reliance Communications and Tatas could buy up to two blocks.
Apart from Mukherjee, the other members of this ministerial panel are Defence Minister AK Antony, Telecom Minister Kapil Sibal, Information and Broadcasting Minister Ambika Soni, Home Minister P Chidambaram, Agriculture Minister Sharad Pawar, Law Minister Salman Khursheed, Planning Commission Deputy Chairperson Montek Singh Ahluwalia and Minister of State in the Prime Minister’s Office V Narayanasamy.
DoT had presented two options to the panel of ministers – to sell up to 13.75 MHz or sell all available airwaves in the 1800 MHz in the upcoming auctions, including the frequencies vacated by the armed forces. Mobile phone companies have been demanding that all available spectrum in the 1800 MHz be put up for sale.
The EGoM also approved the fresh auction timetable sent by the telecom department. According to the revised timeline, the information memorandum containing all details of the sale will be released on August 6.
This will leave the government with 25 days to conduct the pre-bid conference, issue clarifications, invite applications for the sale process, check compliance and carry out the bidding process.
This 25 day-period will be much less than the four months that lapsed between the release of the information and the completion of the 3G auctions in 2010.