Amid raging controversy over irregularities in allocation of spectrum to new players last year, the government has announced a fresh roadmap for starting next generation 3G mobile services, the radio waves for which would be auctioned from January 14.
The Department of Telecom (DoT) has said the auction of 3G spectrum would be carried out in four stages - invitation of bid, pre-qualification, auction and grant of spectrum.
The DoT would hold a pre-bid conference on November 16 and the mock auction would be conducted on January 11-12 next year.
“The auction of 3G spectrum would start on January 14, 2010,” the DoT said, adding that this is an indicative time schedule and subject to revision.
According to the revised schedule, there is a slippage of over a month compared to the original plan as announced by the Empowered Group of Ministers.
The earlier deadline given by the government was December 7. However, due to a lack of clarity on the availability of radio waves for auctioning the process got further delayed.
The plan to auction 3G spectrum comes at a time when the DoT’s policies for 2G mobile services (award of licences and subsequent allocation of spectrum) has come under scrutiny and the CBI is looking into the alleged irregularities.
The DoT is facing a charge that 2G spectrum was doled out to new players very cheaply by not auctioning it and rather bundling it with the licence, causing huge loss to the exchequer.
The revised memorandum also said that foreign firms would be allowed to bid for spectrum for third generation mobile services.
“Interested foreign entities are allowed to participate in the auctions directly and apply for licences subsequently,” the revised Information Memorandum, containing details about eligibility criteria and time schedule, said.
Foreign entities can operate telecom services in India only through an Indian subsidiary with not more than 74 per cent foreign share holding, subject to the approval of the Foreign Investment Promotion Board (FIPB).
The revised memorandum also gives details on the spectrum charges the successful bidders will have to shell out over and above the spectrum acquisition fee.
An annual spectrum charge would be levied on the total adjusted gross revenue of 2G and 3G services taken together.
However, there would be a moratorium of one year on the payment of annual spectrum charges for the standalone 3G operator. No moratorium would be applicable to the existing operators holding both 2G and 3G spectrum.
Stating the roll-out obligation, the memorandum said, in the metros, the licensee to whom the spectrum is allocated shall be required to provide service in at least 90 per cent of the area, within five years.
The memorandum also gives details of the number of blocks available in each circle for auction.
The Empowered Group of Minister had earlier said five blocks of spectrum would be auctioned in each circle with one block reserved for the state-run telecom firms BSNL and MTNL.
However, there is no block available for auction in Rajasthan and North East.