DoT weighs options to resolve spectrum auction mess

The Department of Telecommunications (DoT) is working on various alternatives to overcome the hurdles arising out of a lacklustre auction of 1,800-MHz telecom spectrum.

First, DoT was looking at an alternative to the auction method that would include a "lower upfront fee" and a revenue-sharing model, said a senior official in the telecom ministry. DoT might also urge the Centre to approach the Supreme Court, asking it to either endorse the base price or allow DoT to opt for an alternative method of pricing the spectrum, as that used in the recent auction had failed.

A third option is to re-auction circles for which there were no bidders. These circles include Delhi, Mumbai, Karnataka and Rajasthan under the GSM platform, and all the circles for the CDMA 800 MHz spectrum.

It could approach the telecom regulator to consider a method for the re-auction, which would also mean reassessing the base price.

DoT officials admit the amount it would actually collect from the auction would be much lower than Rs 9,407 crore that has come its way, as it has to adjust for a substantial amount paid by operators as fees for licences cancelled by the Supreme Court.

Now, ministry officials are estimating how much it would collect from the auction, as well as from the one-time fee, this financial year. The issue of an alternative plan of action is expected to be finalised next week. Also, the auction has to be confirmed by DoT.

Operators, especially GSM ones, have been clamouring for simultaneous auction on 1,800 MHz, 900 MHz and the guard band in the 800 MHz. DoT sources say the auction of 900 MHz based on the current pricing mechanism, according to which it would be 1.3 times the price of 1,800 MHz, doesn't seem feasible and might, therefore, be reconsidered.

PTI reports

DoT is optimistic of finalising guidelines for unified licence regime by December. "Our effort is to get the UL (unified licence) regime by the end of December.... There are many issues involved. That is something on which we are not ready to make a commitment at this time, but we will resolve those issues by end of December," Telecom Secretary R Chandrashekhar said.