The Department of Telecom is grappling with the issue of auctioning 1800 MHz band due to non-availability of contiguous spectrum in all the circles.
The DoT has now sent three options to the Telecom Commission, including charging a premium from operators that win in the next round of auction if they are given contiguous spectrum.
The 1800 MHz band being put for sale in the next round of auction is not available in contiguous blocks of 5 MHz in all the circles.
This means that the spectrum given to a winning operator post the auction could be split into 2 or 3 chunks. So an operator could get 2.5 MHz chunk in the lower part of the 1800 MHz band and the balance in the upper part. Such an allocation would make it difficult for operators to offer data services.
While non-contiguous spectrum works for offering voice services, higher technologies need the airwaves to be bunched up together. But there are a few areas where 5 MHz contiguous chunk of spectrum is available. An inter-ministerial committee, which met recently, to finalise the auction rules has taken a view that such contiguous blocks of airwaves could be sold at a premium.
Other option
The other option put forward by the DoT is to allow winning operators to withdraw their bids, after the auction ends, if they are not given contiguous spectrum. Industry experts said the auction could end up being a damp squib because operators will not put a high value to such non-contiguous spectrum. Also, by allowing bidders to withdraw their bids could encourage non-serious players to enter the fray and then bail out on grounds that it was not getting contiguous spectrum.
This could also disturb the playing field because some operators will get single chunk of 5 MHz spectrum while others could end up with splintered airwaves.
The third option being considered is to introduce a ranking system in the auction process.
Under this system bidders will be given a ranking based on bidding activity. For example, an operator that bids aggressively will be given a higher ranking for acquiring contiguous spectrum.