The Telecom Commission has decided to sell all available spectrum, post cancellation of 2G licences, during the upcoming auction in March.
This is in line with the order of the Supreme Court that asked the Department of Telecom to auction the entire quantum of spectrum.
This could mean that telecom companies will be able to buy spectrum at base price because now the supply is more than the actual demand.
Earlier plan
Under the earlier plan, the DoT had chalked out a strategy to restrict the sale to about 10 blocks (each block of 1.25 MHz).
This would have been sufficient for two players, each taking 5 blocks. But now, DoT will have to put the entire block of spectrum for sale that will be available post the cancellation of 2G licences issued in 2008.
This could have an indirect impact on Government’s plans to re-farm spectrum in the 900 MHz band from incumbent players, including Airtel and Vodafone.
The original plan was to reserve some spectrum in the 1800 MHz band for shifting the older players from the 900 MHz band. But if the entire 1800 MHz band is put on sale then the Government will not have enough to accommodate the incumbent players.
‘Govt set a precedent’
According to Rajan Mathews, Director-General of the Cellular Operators Association of India, the Government may have to scrap plans to re-farm because even if spectrum is left unsold in the 1800 MHz band then it will be have to be put back for auction with a lowered reserve price.
“The Government has set a precedent by lowering the reserve price after spectrum remained unsold in the 1800 MHz band after the November auction,” said Mathews.
thomas.thomas@thehindu.co.in