DoT postpones spectrum auction to 3 February
30 Dec 2013
The government has postponed a planned auction of mobile phone spectrum to 3 February 2014, delaying the bidding by 10 days from the original schedule.
Accordingly, the last date for submitting applications by prospective bidders has also been postponed to 15 January 2014.
The revised auction schedule posted on the web site of the department of telecommunications (DoT) for the auctioning of airwaves in the 900 and 1800 megahertz frequency bands did not specify the reason for the deferment of the auction.
The DoT, meanwhile, is yet to take a decision on change in the annual fee mobile phone companies should pay for using spectrum as recommended by the Telecommunication Regulatory Authority of India (TRAI), the sector regulator.
TRAI had suggested bringing all the rates to a common level of three per cent of adjusted gross revenue.
However, the two major telecom industry bodies and leading service providers have differed among themselves as to what should be the annual rates for spectrum usage.
While GSM service providers like Bharti and Vodafone have agreed on the 3-6 per cent charges, companies on CDMA licences and on BWA platform like Reliance Jio, which pay a one per cent charge, have objections. But all agree that the government must decide on the issue before the start of the auction.
Leading mobile phone service providers like Bharti Airtel Ltd and Vodafone Group Plc's Indian unit have urged the government to decide the annual spectrum fee before the start of the auction.
Companies like Reliance Jio feel that a migration to a flat SUC will be unprofitable for them since they were allowed to offer voice licence in addition to data services on the promise of a lower SUC.
One options is that migration to the common SUC happen over stages so that the impact on the cash flow of the companies is minimised. The price discovered in the auction will also act as the base price for companies to renew their permits in some key cities, which are due this year.
The auction is crucial for these service providers as they have to renew their permits in some key cities.
The government expects to raise about Rs11,000 crore from the latest round of spectrum auction.
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