Spectrum auction almost certain, but only after polls

A government panel set up to resolve the critical issue of additional spectrum allocation has decided to switch from the current subscriber-based system to an auction-based system, an agency report quoting a senior telecom department official said. This system is widely believed to be more transparent and equitable than the current model.

The official was quoted as saying that the report would be submitted in the next 10 days and there was a consensus view to shift to the auction method. Every change would affect the existing parties in different ways and "we would try our best to bring out a fair, just solution which would be beyond legal challenge. We have already heard the stakeholder and taken their inputs", the official said.

However, any final decision on this will have to be taken by the next government.

Currently, operators using GSM technology get 6.2 MHz of spectrum each while those using the rival CDMA get 5 MHz each. GSM operators can have a maximum of 15 MHz spectrum, while for CDMA operators, the limit is 7.5 MHz. The task of the panel, headed by DoT additional secretary Subodh Kumar, is to look at a model of spectrum allocation allotments beyond the existing 6.2 MHz and 5 MHz.

Operators already holding spectrum above the 6.2 MHz and 5 MHz may have to pay a one-time fee for the excess spectrum. The three top GSM operators - Bharti, Vodafone, and Idea (in some circles) – all hold over 6.2 MHz of spectrum.

The 3G auction process has already been deferred thrice from its initial schedule (which was to end in February) due to inter-ministry disagreement on issues like the reserve price and the quantum of spectrum to be auctioned. The matter was referred to the cabinet committee on economic affairs, which put the decision in the hand of a group of ministers in January.

A few days later, the clamps on decision making in the election code of conduct came into force. The GoM has not met on the issue.

The memorandum of understanding to be signed between the DoT and the defence ministry for vacation of spectrum by the latter has also been delayed. Talks have been on for over two years

It has been decided that a dedicated optical fibre network for the armed forces would be set up within the next four years, for which about Rs9,000 crore and approval of the CCEA would be required.

On the signing of the MoU, the defence forces will vacate 15 MHz of spectrum. While 10 MHz will be used for 3G and will be auctioned, 5 MHz will be used for 2G services. The vacation of spectrum will, however, take place in a phased manner.