Following on from a sale of 1800MHz spectrum in November 2012, the Indian government is set to release a further 285MHz of 1800MHz wireless frequencies in an upcoming auction.
According to a report from The Economic Times, India’s Department of Telecom (DoT) has informed TRAI – the country’s telecoms regulator – that a total of 413.6MHz in the 1800MHz band, freed up from the Supreme Court’s cancellation of 122 2G licences in February, must be put under the hammer.
If the extra spectrum were rounded up into the required 1.25MHz block sizes for auction, the Indian newspaper’s sources say the total amount for sale would have increased to 315MHz.
DoT adds, however, that part of the 1800MHz spectrum made available from the cancelled 2G licences is now being used by the military in some areas, bringing down the amount available for auction – in 1.25MHz blocks – to 285MHz.
In Delhi and Mumbai, however, there is a proposal to auction a block of 15MHz in each ‘circle’
The Indian government, largely due to excessive reserve prices, has not had much success in auctioning spectrum of late. In November 2012, the government raised INR94 billion ($1.4 billion) from the sale of 1800MHz spectrum (127.5MHz), but that fell well short of market expectations of around INR400 billion.
India’s subsequently scrapped a another spectrum auction, scheduled for March, due to low interest among telcos (again complaining of high reserve prices). Only Sistema Shyam TeleServices Limited (SSTL), which had 21 of its 2G licences cancelled in the Supreme Court’s cull, was the sole bidder (acquiring 800MHz spectrum in eight circles at the base price).
In the three months to June, SSTL posted a net loss INR8.45 billion compared with a net loss of INR11.8 billion in the same quarter a year earlier – a positive side-effect perhaps from being forced to trim down its operations. Revenue, however, fell 30 per cent, to INR2.91 billion, over the same period.
In July, TRAI embarked on a period of industry consultation on how 2G spectrum should be priced.