DoT suspends spectrum trading, sharing during auction

The department of telecommunications has 'suspended' spectrum sharing, trading and liberalisation activities till the provisional results of the upcoming spectrum auction are declared.

"The Spectrum Trading Guidelines ... would remain suspended during the time of conduct of auction ie from the date of issue of NIA for auction of spectrum to the date of publishing of provisional result of the auction," the amended spectrum sharing and trading guidelines said.

Similarly, the DoT has suspended spectrum sharing and liberalisation activity as well. The move may impact merger of Reliance Communications with Sistema Shyam Teleservices as well as Reliance Communications and Aircel to some extent.

According to the sources, this move by the government is to ensure that upcoming spectrum auction, in which airwaves worth Rs5.63 lakh crore is being put for sale, attracts good interest from bidders.

The rounds are scheduled to start from 29 September. There is no certainty when the auction will end. In 2010, bidding rounds for 3G spectrum closed after 34 days.

The government expects to get around Rs64,000 crore from the sale of airwaves this fiscal.

However, experts feel that the upcoming auction will see moderate participation.

"This (DoT move) could be in view of calculating spectrum cap. It would be difficult to assess if a company is bidding in the auction and simultaneously engaged in spectrum trading or sharing deal," Khaitan & Co LLP, Associate Partner, Harsh Walia told PTI.

ICRA expects moderate participation in the auction that will fetch government bids worth around Rs60,000-65,000 crore and elevate the industry debt level to around Rs4.7 lakh crore from the current level of Rs4.1 lakh crore.