The new amendments will also put more load on bidders compared to the previous auction
Aimed at ensuring faster roll out of 4G technology networks, the Department of Telecommunications (DoT) has made a few changes in the rules that are likely to increase reverse price for spectrum, particularly in the 900 MHz (GSM) band, in the auction next month.
The new clause added for the auction says that the company acquiring spectrum in the forthcoming auction “shall provide details of the technology proposed to be deployed for operation...within one month of obtaining the licence, if the technology happens to be other than GSM/WCDMA (3G)/LTE (4G)”. DoT sources said this change would put pressure on companies bidding for the spectrum as the reserve price of radio waves was expected to increase by 1 per cent for excess demand if the DoT decided to increase the quantum of spectrum for bidding. Notably, in the earlier auctions, the increase in base price was linked to excess demand for every 1.25 MHz spectrum.
About 403 MHz of 2G spectrum in the 1800 MHz band, and about 45 MHz of spectrum in the 900 MHz band are being put up for auction. The latter band will be most sought-after by the old operators who already have it and invested hugely on their network roll-out. As their licences are coming up for renewal, these operators are likely to bid aggressively for it. The DoT is hoping to garner at least Rs.11,300 crore from the upcoming spectrum auction.
Replying to queries of various telecom players regarding the spectrum auction that begins on February 3, DoT has made two dozen changes in various terms. The bidding companies have been told to provide information regarding any new technology they wanted to deploy one year before starting trials.
The DoT has also asked telecom operators such as Uninor, Videocon and Sistema Shyam Teleservices, which had won spectrum bids in November 2012 and March 2013, not to re-submit performance bank guarantee (PBG). As per the rule, PBG in prescribed format shall be submitted for Rs.35 crore by the ‘new entrant’, and for Rs.21 crore by ‘existing licensee’ per service area for a minimum period of six years before signing the licence agreement.