Govt may not auction 1800, 900 mhz spectrum simultaneously

New Delhi: It is possible that auctions for 900 mhz spectrum band may not be conducted alongside the 1,800 mhz band this time.

According to sources in the Department of Telecom (DoT), there is really no urgency to auction 900 mhz spectrum, which is anyway tied with refarming of airwaves, and one possible scenario could be conducting an auction for just 1800 mhz 2G airwaves this July.

[caption id=“attachment_682571” align=“alignleft” width=“380”] The DoT sources said first licences come up for renewal only at the end of 2013. Reuters[/caption]

In the last round of auctions, which was held on March 11, the DoT had put up 900 mhz spectrum for bidding in three service areas of Delhi, Mumbai and Kolkata because in these areas licences of some telcos were coming up for renewal first.

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The DoT sources said first licences come up for renewal only at the end of 2013 so perhaps the department could conduct auctions separately for 1800 mhz and 900 mhz.

“There could be two auctions, 1800 and 900 separately. Another scenario could be 1800 in all circles and 900 in the three circles of Delhi, Mumbai and Kolkata. We are yet to take a final call.”

The sources said a rethink on whether to conduct 900 and 1800 mhz band auctions simultaneously was possible since after the recent Supreme Court order, all the spectrum which was released after licences were quashed earlier needs to be put up for auction.

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Late last month, DoT denied a request for extension of licences in Mumbai, Delhi and Kolkata by Vodafone that are coming up for renewal in late 2014. A story in the Economic Times on March 24 also quoted a top DoT official as saying that a similar request from BhartiAirtel has been rejected as well.

The same story quoted a DoT communication to Vodafone which said under the new policy on spectrum allocation, airwaves have been delinked from licence.

Therefore, the firm must participate in the auctions to be held later this year to access airwaves at market price.

“Unless you participate in auctions and get your bid confirmed, you would not be entitled to wireless licence, which is a requisite,” DoT said.

It added that Vodafone was given a chance to participate in auctions, concluded early this month, but it stayed away.

So now, Vodafone, Bharti and any other telco which holds 900 mhz airwaves will only be able to retain 2.5 Mhz in this spectrum band and will have to bid for the rest.

The auction discovered price will apply to the retained portion as well. But if the auction is going to happen in two tranches, what happens to the Government’s plan to refarm spectrum also remains to be seen.

The DoT has already said that any spectrum more than 2.5 mhz which is held by incumbent telcos will have to be given up.

Then, they can bid afresh for either winning back the surrendered 900 mhz spectrum or the much cheaper 1800 mhz spectrum to continue offering 2G services. The price of 900 mhz spectrum is twice that of 1800 mhz as per TRAI recommendations.