India’s Department of Telecommunications (DoT) has announced that its long-awaited auction of 3G and WiMAX-capable Broadband Wireless Access (BWA) spectrum will begin on 14 January next year. The start date is about a month later than anticipated. In a revised memorandum document published late last week, the DoT said the auction will be conducted in four stages: an ‘invitation’ stage for applications that closes on 21 December, a ‘Pre qualification’ stage to be completed on 7 January, the actual auction stage (beginning 14 January for 3G spectrum and later for BWA and 800MHz spectrum) and a final approvals stage. However, the DoT added that this timeframe may still be subject to change and has urged bidders to monitor its website for updates. The auction was originally scheduled to commence almost a year ago but has been subject to numerous delays, most notably the Indian general elections in May. In the meantime, the government has almost doubled the reserve price for obtaining pan-India spectrum from INR20.2 billion (US$435 million) to INR35 billion (US$753 million). According to the government, the auction is expected to raise around INR250 billion (US$5.4 billion).
India aims to sell around four 3G licenses and three mobile broadband licenses in 20 of the 22 telecom zones in the country. In the case of the 3G auction, the government has decided to auction up to 20 MHz of paired spectrum in the 2.1GHz band in the telecom service areas where 25 MHz or more paired spectrum is available. In such cases, four blocks of 2X5 MHz will be auctioned in addition to one block being reserved for BSNL and MTNL (the two state-owned operators that have already been allocated spectrum). In service areas where less than 25 MHz paired spectrum is available in the 2.1GHz band, the actual amount of available spectrum in blocks of 2X5 MHz will be allocated, with one block being reserved for BSNL/ MTNL. Not more than 1 block of 3G Spectrum, 1 block of 800MHz spectrum or 1 block of BWA spectrum is to be allocated to any single bidder in a service area. “The government… is keen that potential new entrants to the Indian telecoms sector, as well as existing operators, should be encouraged to take part in the auctions,” the DoT said in its statement. To this end, it said it will allow foreign operators with “experience of offering 3G services” to bid for spectrum on their own and then transfer it to a company incorporated in India. It has also relaxed guidelines around External Commercial Borrowing (ECB) to permit ECB up to US$500 million to finance spectrum acquisition fees.