2G auction to be launched by mid-June, says DoT

The department of telecommunications (DoT) is preparing for a mid-June launch of the auction of second generation (2G) telecom licences and the spectrum, after the Supreme Court cancelled 122 telecom licences earlier this year and ordered the government to resell these through transparent bidding (See: SC cancels all 2G licences, orders fresh spectrum auction).

According to a PTI report, DoT secretary R Chandrasekhar said the government has already begun to move in this direction and will meet the Telecom Commission, the decision-making authority, today to discuss further steps.

However, the terms of the bidding process have still to be finalised. The terms recently proposed by the Telecom Regulatory Authority of India (TRAI) have drawn heavy flak from all around, with Norway's Telenor even threatening to pull out of the country if the terms are accepted.

The telecom companies whose licences stand to be cancelled within four months as well as analysts in general are particularly vexed over the high minimum bidding price set by TRAI; the proposal that only 5MHz of spectrum be auctioned at a time, with the process to be stretched out over almost two years; and the move to allow established operators whose licences have not been cancelled to participate in the bidding along with those whose who are to lose their licences.

Chandrashekhar said the auction process will begin after the government's empowered group of ministers headed by finance minister Pranab Mukherjee takes a final view on the TRAI recommendations. Analysts see a distinct possibility that the government, desperate for cash to finance its profligate spending, may approve the TRAI proposals with minor tweaks.

Chandrasekhar said the process of getting approval from the empowered ministers would take around 45 days. The government has initiated the process of selecting an auctioneer.

"Once these preliminary decisions for the conduct of the auction are taken and the auctioneer is in place, then the two will be put together and the auction process will begin near the middle of June," said Chandrasekhar.

In its proposals finalised on 23 April, TRAI advised DoT to engage an auctioneer for three years.