Mock-auction for 3G bidders goes off smoothly

The government on Monday held a mock auction for its long-awaited sale of 3G spectrum, and has convened a meeting for today in which the bidders will be briefed about the modalities of the actual auction.

The mock exercise was designed to make the process transparent for the nine 3G and 11 broadband wireless access (BWA) bidders and to familiarise them with the system. The actual auction of 3G radio waves, which will allow mobile service providers to offer high-speed voice, data and multimedia services, starts on Friday while the broadband wireless access (BWA) auction will take place later this month.

According to a senior department of telecommunication official, N M Rothschild, which designed the auction process along with DotEcon, will make a presentation to the bidders at tomorrow's meeting.

The process of e-auction allows applicants to bid from their computers. Applicants bidding for the spectrum and taking part in the auction had to log into the computer system with encrypted keys and then for every slot of spectrum they were given an option to bid.

The first ever auction of spectrum is expected to fetch the government a revenue of Rs35,000-45,000 crore, which is banking on this to shore up its yawning budgetary deficit. However, the auction, as most companies realised today, would be a long-drawn one lasting at least one-two weeks.

Under the system, the auction prices would be increased to 10 per cent from 1 per cent after each round. For instance, if the number of bidders is one more than the number of spectrum slots, the increase would be 5 per cent. If there are two more bidders than the number of slots, it would be raised by 10 per cent. However, if the number of bidders is the same as the number of slots, the price would go up by only 1 per cent.