Operators request to postpone the next spectrum auction

By October 31st, 2014 AT 6:23 PM

towerAirtel, Vodafone, Idea and Reliance have sent a joint letter to the Telecommunication Minister Ravi Shankar Prasad and Prime Minister Narendra Modi requesting to postpone the next spectrum auction till sufficient spectrum across bands are available for sale.

Bharti Airtel currently holds 900 MHz in 13 non-metro circles. Vodafone and Idea have 900 Mhz spectrum in 9 non-metro service areas. All the 9 non-metro spectrums of India and six spectrums each of Airtel and Vodafone will expire by 2016 while seven 900 Mhz permits of Reliance Communications will expire in 2015.

As per the operators, the letter was for common representation to offer a practical solution to the critical problem of inadequate spectrum availability for the next auction. They also say that it is in public interest as it will protect government revenues, ensure continuity of services, secure existing investments and maintain/restore investor confidence in the sector.

Telcos in the letter also proposed the government to auction the entire 900 MHz spectrum allocated to state-run Bharat Sanchar Nigam and Mahanagar Telephone Nigam, as their permits are also coming up for renewal, in-case there is a shortage of spectrum. They also warned about the possibility of business disruptions, including potential closure in the 11 circles where permits are due for extension, in the event operators failed to win back expensive spectrum in the 900 MHz band.

DoT is planning to auction a total of 104 units of spectrum in the 1800 MHz band and 184 units in the 900 MHz band next February. TRAI has suggested a base price 10% higher than the reserve price fixed for the February 2014 auctions, at INR 2,138 crore per unit of 1800 MHz spectrum for 20 circles. In the 900 MHz band, the base price for 18 circles adds upto INR 3,004 crore, which is 1.5 times the price of 1800 MHz.

An IT professional who has got great passion for telecom. Has been closely watching Indian telecom space since 2009.

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RamaAPpL€ LoVeR™ Recent comment authors
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Rama
Rama

I dont know much about Telecom but from what I know this is how auctions take place. Earlier spectrum was allocated administratively and often times bundled with the license. Additional spectrum were allocated to operators depending on their subscriber base. Spectrum allocated before 2000 was alloacted administratively. A starting spectrum of 4.4 mhz was provided along with licence and later on if certain subscriber base related targets were met more spectrum was given to operators again administratively. The duration of this license and spectrum is 20 years and in the pre-2000 era spectrum was mostly allocated in the premium 900… Read more »

APpL€ LoVeR™
APpL€ LoVeR™

Darshan,Rama,SS,Great Sudhakar,i have some doubt regarding this spectrum auctions if you able to clarify it please help me here. This GSM lobby known as COAI fixes profit, number of customers,price to be charged in each packs, in each circles for Airtel-VOdafone-IDea(AVOID)s(this statement is based on my limited knowledge from various sources and i don’t have any proof to prove it). Suppose if government decides to cancel 900MHz of spectrum of BSNL and come to auction with a reasonable amount of spectrum,then what will be this GSM lobby plan to do? My doubt for you is that, is there any chance… Read more »

Rama
Rama

COAI only represents the interests of GSM operators they are not involved officially in the process of spectrum auction or allocation. That is taken care by DOT.

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