Government issues notice for India’s 3G auction

The Government of India has issued notice inviting bids from private telecom operators to take part in the auction of radio-frequency spectrum for third-generation (3G) telephony.

According to the Notice Inviting Applications (NIA) for the auction of 3G spectrum in 22 circles, most of the circles, including 4 metros – Delhi, Mumbai, Chennai, and Kolkata – will have 3 private operators. .

Only 5 states – Punjab, Bihar, West Bengal, Jammu and Kashmir, and Himachal Pradesh – will have 4 private operators.

The Notice Inviting Applications said all the successful bidders will be allowed to provide 3G services on a commercial basis from September 1, 2010.

The Department of Telecom (DoT) said in its Notice Inviting Applications that the Central Government has set Rs 3, 500 crore as the starting bandwidth-auction price for one slot.

The government has fixed the base reserve price for an all-India rollout of broadband services at Rs 1,750 crore.

The Notice Inviting Applications, published on the website of the Department of Telecom, says that the bandwidth-auction for 3G will have 2 phases – the clock stage, and frequency identification stage.

The clock stage, according to the notice, will establish the bidders who are to be given a block in each telecom service area where there is at least one block available for auction. In each telecom service area, operators will bid for a right to a single spectrum block not connected to any specific frequency. The outcome of this stage will be a common winning price for all the blocks within a circle, and, subsequently, the bidders from the service area.

After the clock stage comes the frequency identification stage, which will identify specific frequencies for the winning bidders.

The frequencies identified, the Department of Telecom said, will be announced along with the result of the clock stage. And, the frequency identification stage is to be a random identification of frequencies, which will be automatically conducted by the electronic auction system.

The process is scheduled to conclude on April 10, 2010. According to the Department of Telecom, the auction for spectrum for broadband services will be held 2 days after the process ends.

The total number of slots up for auction excludes the slots allotted to the government-run Bharat Sanchar Nigam Limited (BSNL) as well as Mahanagar Telephone Nigam Limited (MTNL).

BSNL and MTNL, which were allotted licences in 2009, have already begun providing 3G services in their operating circles.

Following is the schedule for the auction of radio-frequency spectrum for 3G telephony: Notice Inviting Applications – February 25, 2010; last date of submission of application – March 19; publication of ownership details of applicants – March 26; pre-qualification of bidders – March 30; mock auction – April 5-6; starting of 3G auction – April 9; and starting of broadband spectrum auction – 2 days after the close of 3G auction.