India sets guidelines for 2G reauction

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India’s Department of Telecom (DoT) has announced guidelines for the reauction of its 2G spectrum, following the Supreme Court’s cancellation of the licences that were awarded in a 2008 spectrum sale, earlier this year.

The 1800MHz and 800MHz spectrum will be auctioned off in 1.25MHz blocks. In the 1800MHz band, a minimum of eight blocks of 1.25MHz will be put to auction in all service areas, with an additional three blocks reserved to meet the requirements of new entrants, if such a necessity arises. Existing operators will be allowed to take a maximum of two blocks and new entrants will be required to bid for a minimum of four blocks.

In the 800MHz band, three blocks of 1.25MHz will be auctioned. With existing operators limited to bidding for just one block, while new entrants are required to bid for a minimum of two blocks.

The DoT said that the objectives of the auction are to obtain a market determined price for spectrum through a transparent process, ensure efficient use of spectrum and avoid hoarding, stimulate competition in the sector and maximise revenue proceeds from the auctions within the set parameters.

India’s telecoms regulator, the TRAI, was criticised for recommending a reserve price close to ten times more than what operators had paid in 2008,. Rs 36.22bn ($687m) for every MHz of nationwide spectrum in the 1800 MHz band, compared with a price of Rs 3.8bn rupees in the 2008 sale.

However, the DoT has said that the reserve price, along with terms of payment and spectrum usage charges will be announced separately at a later date.

The spectrum is being reauctioned after the Supreme Court of India cancelled 122 telecoms licences that were awarded in a 2008 spectrum sale, due to corruption marring the sales process, with former cabinet minister Andimuthu Raja facing trial for his role in the scandal.

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