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Indian Govt Modifies Auction Guideliness: 3G CDMA Auction, WiMax Reserve Price Increased

The headline for this PTI report would have you believe, incorrectly, that only those companies with prior 3G experience are allowed to bid for a 3G spectrum in India. That is not the case. The updated guidelines are available for download – for 3G and Broadband Wireless Access.

The Department of Telecommunications (DoT) has modified the 3G guidelines as follows:
New Applicants Need 3G Experience: Now companies with either a Universal Access Service (UAS) License or a Cellular Mobile Telephony Service (CMTS) License may bid for spectrum. Apart from this, companies with prior 3G experience who give an undertaking to obtain a UAS License may also apply.
CDMA Spectrum Auction: 2×1.25MHz of spectrum in the 800 MHz band, which was previously going to be made available to CDMA operators at the price-equivalent to the highest bid in the 2.1 GHz band, will now be auctioned as well. However, they’re getting a reserve price for the auction as 25% of the reserve price for the spectrum in 2.1 GHz band.
Spectrum usage charges lowered: Now, instead of charging companies 1 percent of their Adjusted Gross Revenue after 1 year, as spectrum usage charges, the government will charge 1 percent of incremental revenue due to 3G, after a period of 1 year.

In case of Broadband Wireless Access,
ISPs Included: Category A and B ISPs can also bid for BWA spectrum
Reserve Auction Price Increased: The reserve auction price was earlier supposed to be 25 percent of the 3G auction price – Rs. 40 cr for Mumbai, Delhi and Category A circles, Rs. 20 Crores for Kolkata and Category B, and Rs. 10 crores for Category C circles. The new reserve price: Rs. 80 crores for Metro & Category A, Rs. 40 crores for Category B, and Rs. 15 Crores for Category C circles.
Roll Out Obligations have been relaxed, and licensees in Category A, B & C circles no longer have to 25 percent of rural SDCAs within two years. However, by the end of 5 years, they will still need to ensure 90 percent coverage in metro cities, and 50 percent in Rural SDCAs.

One other interesting change, which leaves the entire auction ready for controversy, if invoked – “The Government of India reserves the right to cancel the bidding process or disqualify any bidder without assigning any reason.

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