The Lowdown: DoT’s Guidelines For 2G Spectrum Auction In March 2013

The Indian government has released guidelines for an auction of spectrum expected to take place in March 2013, where unsold spectrum from the previous (and largely unsuccessful) spectrum auction will be put up for sale, along with the sale of spectrum in frequency bands used for CDMA services. All CDMA operators had opted out of that auction, including MTS (Shyam Sistema), which operates only CDMA services, and whose licenses were cancelled along with that of many others in this band.

Bidding in a service area will take place simultaneously for 1800MHz and 900MHz band, while spectrum in the 800MHz band will auctioned separately

Spectrum available for licensing, with a validity of 20 years:

1800MHz band: block sizes of 1.25MHz (paired) are on sale in Deli, Mumbai, Karnataka and Rajasthan. In the Service Areas of Karnataka and Rajasthan, in addition to the 8 blocks (10MHz), there will be a provision for spectrum up to three blocks each of 1.25MHz (total 3.75 MHz) for topping up the eight blocks of spectrum put to auction i.e. a total of 11 blocks each of 1.25MHz, totalling to 13.75MHz, to meet the requirements of new entrants if needed. Note that in Rajasthan, spectrum is not available in 11 districts namely Bikaner, Barmer, Bharatpur, Dausa, Ganganagar, Hanumangarh, Jodhpur, Jaipur, Jaisalmer, Jalore & Sirohi. The Spectrum Cap for each Operator in 1800MHz band is 50% of spectrum allotted and put for auction in 1800MHz band.

900MHz band: block sizes of 1.25MHz (paired) are on sale in Delhi, Mumbai and Kolkata. The Spectrum Cap for each Operator in 900MHz band is 50% of spectrum allotted and put for auction in 900MHz band.

800MHz band: block sizes of 1.25MHz (paired) are on sale in 21 service ares. No spectrum is on sale in Rajasthan. There is an additional provisioning up to 1.25MHz for topping up the three blocks of spectrum, if needed, to meet the requirements of new entrants in service areas excluding Delhi, Kolkata, Maharasthra and Mumbai. In Andhra Pradesh and Punjab, only 2 blocks of (2.50MHz) will be put up for auction and no top-up blocks are available. There is a spectrum cap of 25% of spectrum in each service area.

Points to note:

- Base price of CDMA spectrum is half of that in the last auction.
- Base price of GSM spectrum is lower by 30 per cent.
- Base price of 900 Mhz is twice as expensive as that in 1800 Mhz.
- Existing Licensees will be allowed to use the additional spectrum block(s) allotted through this auction to deploy any technology by combining with their existing spectrum holding in the same band after converting their entire existing spectrum holding into liberalised spectrum in the same band
- In case of a change of technology, to other than GSM, CDMA, WCDMA, LTE and WiMAX, prior clearance will be required.
- Operators whose entire spectrum holding in a particular band has been liberalized would be permitted to share spectrum without any additional one time spectrum charge, although guidelines regarding spectrum sharing will be released separately.

Timeline of Events

Here’s a timeline of events following the Supreme Court Verdict in the 2G Spectrum Allocation Scam case:

2nd Feb 2012: Supreme Court cancels 122 licenses of 22 operators and directed the Government to conduct fresh auctions for sale of the spectrum within a period of four months, asking the TRAI to come up with fresh recommendations.

5th March 2012: The Indian government files a review petition in the Supreme Court in response to the Court’s verdict in the 2G spectrum allocation case, asking the court to only review the part of the order where it had deemed the ‘ first-come-first-serve’ spectrum allocation policy of the government flawed.

24th April 2012: The TRAI comes out with recommendations on spectrum reserve price, and also proposes refarming in the 900MHz band, and liberalization of spectrum. Telcos express dismay as they feel the price is steep.

24th April 2012: The Supreme Court extends the deadline for the auction of 2G licenses which were cancelled by it, from June to 31st August 2012, and asks telcos whose licenses were cancelled to continue services till 7th September.

5th July 2012: The Department of  Telecom (DoT) posts a notice on its website announcing guidelines for the upcoming 2G spectrum auction,  including eligibility, amount of spectrum and number of blocks, however, it did not announce the minimum bidding price for the auction.

24th July 2012: Reports suggest that the Empowered Group of Ministers (EGoM), the minister panel responsible for finalizing rules for the upcoming 2G spectrum auction, has recommended a reserve price of Rs 14,111 crore and Rs 15,111 crore for a block of 5 MHz of spectrum in the 1800 MHz band on a pan-India basis.

3rd August 2012: India’s Cabinet of Ministers sets 2G auction price.

August 6th, 2012: India Sets 2G Spectrum Auction Reserve Price At $2.5 Bn For GSM, $3.2 Bn For CDMA

August 6th, 2012: What They’re Saying About India’s 2G Reserve Price: BSNL, Airtel, COAI, Idea & More

November 15th, 2012: India’s 2G Auction Ends: Results Chart, Operatorwise Results & What Next

December 10th, 2012: EGoM Reduces 2G Reserve Prices By 30% in 4 Circles

December 21st, 2012: DoT To Auction Increased Spectrum In Forthcoming 2G Auction

- January 18th, 2013: Cabinet Approves 50% Reduction In 2G Reserve Prices For CDMA Spectrum