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EGoM to consider a revised timeline for the spectrum auctions

06 Aug 2012 Evaluate

The Empowered Group of Ministers (EGoM) on telecom headed by finance minister P Chidambaram will be meeting today to consider a revised timeline for the spectrum auctions, as the government may not be able to finish the sale process by August 31, as was directed by the Supreme Court.

The Department of Telecom (DoT) has told the panel of ministers last month that the information memorandum containing all details of the sale will only be released on August 27, making it impossible for the government to meet deadline, while going through a bidding process by August 31. After the conditions of DoT, the government is left with just three days to conduct the pre-bid conference, issue clarifications, invite applications for the sale process, check compliance and carry out the bidding process, making it almost impossible. During last auction in 2010, the period between release of the information and the completion of the 3G auctions was about four months.

So the panel will decide if the government should approach the apex court seeking an extension of the August 31 deadline. Meanwhile, all other issues have been resolved by the panel and the reserve price for auction of second-generation or 2G licenses has been reduced by almost a quarter from the recommended, at Rs 14,000 crore ($2.5 billion) or at about 7.4 times the 2008 price, for five units of airwaves in the 1800 MHz band for all of India's 22 telecoms zones, or around Rs 2,800 crore per MHz.

The Cabinet approved the recommendations of the panel of ministers on spectrum to keep the reserve price of the 800 MHz band (used by telcos on the CDMA platform) at 1.3 times that of the 1800 MHz band. It had also decided to continue with the existing annual airwave usage slab of between 3 and 8 percent of companies’ revenue, higher than a flat 3 percent rate suggested by the sector regulator.

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