After the recent auction flopped, the Department of Telecom (DoT) has drawn out a fresh action plan to sell spectrum in both 1800 Mhz and 900 Mhz bands within the next three months. The auction will, however, be limited to only the four areas (Delhi, Mumbai, Karnataka and Rajasthan) which did not receive any bids in the recently concluded auction.
In addition, spectrum will be sold in Kolkata to enable re-farming of licences set to expire in 2014.
There is no plan to immediately auction unsold spectrum in other circles. The new plan is aimed at helping incumbent operators, whose licences are set to expire in 2014, to decide which spectrum band they want to buy. Incumbent operators who own spectrum in the 900 Mhz band will be asked to give it back and buy it afresh through an auction. According to the DoT if any player does not want to buy back this spectrum, it should get an opportunity to bid for the 1800 Mhz spectrum.
“ In view of the interdependence between 900 Mhz and 1800 Mhz prices, it would be appropriate that auction of spectrum in both these bands is conducted simultaneously in Delhi and Mumbai along with auction of 900 Mhz spectrum,” the DoT said in a note prepared for the consideration of the Empowered Group of Ministers.
800 Mhz band
DoT has also asked the EGoM to take a final view on the 800 Mhz band which was used by CDMA players until now. But the recent auction did not receive any bids from CDMA players. Therefore the incumbent GSM players have suggested merging this band with the 900 Mhz band to make available more spectrum for re-farming. According to the GSM operators the 800 Mhz band can be used for their services as the CDMA players did not bid for it in the recent auction.
CDMA players including Reliance Communications have, however, opposed this proposal and said they would be interested in buying it if the reserve price were to be reduced. In the recent auction the base price for 800 Mhz spectrum was 1.3 times higher than that of 1800 Mhz. As a result there were no takers.
While 1800 Mhz and 900 Mhz spectrum are being used by GSM players, the 800 Mhz band has been allocated to CDMA operators. But now the Government wants to make these bands technology-neutral. This means that once operators buy spectrum in these bands they can deploy even fourth generation technologies. Therefore, the value of 900 Mhz and 800 Mhz spectrum is higher because these bands are suitable for higher technology services.