The in-depth analysis of 3G auctions.

3G Auctions will have two stages.

Clock stage and Assignment stage in clock stage the winners of a generic lot in each circle are determined where as in assignment stage the specific frequencies allocated to winning bidders in each circle are determined .

The clock stage determines a common winning price for a generic lot in each circle where spectrum is available

The assignment stage allows winners to bid for specific frequency blocks in circles in which they have won a generic lot in the clock stage. This allows bidders to state their relative preferences for different frequency blocks.

Price paid is the sum of the common winning price and any winning assignment stage bid.

Clock Stage – Overview

  • There will be simultaneous bidding for generic lots in each of the 22 circles where spectrum is available.
  • The clock stage will consist of a number of clock rounds.
  • The first clock round will begin with all lots in a circle being offered at the reserve price.
  • For each circle, bidders will be asked to state whether they wish to bid for one lot.
  • The ability to make bids is subject to the number of eligibility points held by bidders and activity rules
  • When the clock round finishes, the bids in each circle will be ranked

Where there are n lots available in a circle, the bidders ranked 1 to n will be declared provisional winning bidders
If total demand in a circle is not less than the number of lots available, the price of a lot will be increased in the following clock round, with the price increment linked to the level of excess demand .

In the following clock round, bidders state whether they want a generic lot in each circle at the new prevailing prices

Clock rounds continue until the demand for lots in each circle at the current clock price is less than or equal to the number of lots available in that circle

Once the clock stage closes, the current provisional winners will be declared winning bidders

The lowest winning bid will determine the common winning price for all winners in that circle

How the eligibility criteria are determined?
Each lot has been assigned a specific number of eligibility points, based on the reserve price of licenses in that circle

Service area type and Eligibility points

Delhi, Mumbai and Category A*: 16

Kolkata and Category B** :08

Category C*** :03

*Karnataka,Maharashtra,T.N,Gujarat
**Kerala,M.P.,Punjab,Rajasthan,U.P.(E),U.P.(W),W.B,Haryana
***N.E,Orissa,Assam,Bihar,H.P.Jammu & Kashmir

Each bidder will be having an  initial number of eligibility points in the first round based on its approved bidder application and associated deposit/bank guarantee.

Provisional winning bidders and prices.

At the end of a clock round, and for each circle, each bidder’s highest bid made so far in any round is taken and these bids are ranked by the following criteria

  • Value of bid in that circle.
  • Round in which bid was made.
  • Total value of bids across all circles.

How it Works.

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Time Schedule:

  • Notice Inviting Applications:9th Jan 2009
  • Final Date for Applications:15th Jan 2009
  • Publication of ownership details of Applications:16th Jan 2009
  • Bidder Ownership Compliance Certificate:20th Jan 2009
  • Pre-qualification of Bidders:22nd Jan 2009
  • Mock Auction 27th-28th Jan 2009
  • Start of the 3G Auction 30th jan  2009.

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