Corporate Nov 20, 2012
The Department of Telecom (DoT) has defended its decision to not offer all available spectrum during the just-concluded 2G auctions. The department pointed out that even when only a part of the available spectrum was put up for auction, all of it was not sold and offering more of this scarce resource would not have fetched its real market value.
The DoT has also bolstered its argument by saying that if all available 1800 mhz spectrum were to be offered in auctions, it cannot then subsequently go ahead with the process of refarming, where incumbent telecom service providers will need the less efficient 1800 mhz spectrum in exchange for the more efficient 900 mhz spectrum.
"The effect of allowing the instant application would not be in the public interest in as much as, as it is, part of the spectrum put to auction has not been sold and further none of the participants in the auction were deprived for want of availability of spectrum put to auction, and therefore putting any further spectrum to auction will not fetch the real market value," the affidavit filed by an under secretary in DoT says.
The affidavit clarifies that a total of 95 mhz of spectrum in the 800 mhz band (CDMA) was put up for auction while the GSM (1800 mhz band) spectrum made available for auctions was 295 mhz. This means, during the just-concluded auctions, total 390 mhz of spectrum was made available for auction against 476.3 mhz which was the spectrum earlier allotted to the 122 licensees whose licenses were subsequently cancelled by the apex court in February this year.
Now that the auctions are over, it is clear that there are confirmed bidders for only 127.5 mhz of 2G GSM spectrum against the available 295 mhz. (No auction was conducted for CDMA because all potential bidders pulled out of the auction at the last moment). So the justification given by the DoT about enough spectrum in GSM band being put up for auction is supported by facts.
Also, sector regulator Trai had recommended earlier that refarming - offering incumbents 1800 mhz band instead of 900 mhz band - must be done by the first half of next year. So some amount of 1800 mhz spectrum should be left with DoT to offer to telcos under refarming too. In its recommendations, TRAI asked DoT to make available at least one block of 2 times 5 mhz of spectrum in the 1800 mhz band for refarming.
Meanwhile, agency reports said that the SC today pulled up the government for being 'casual' in handling 2G spectrum case before it and for not auctioning 32 percent of the spectrum vacated as a result of 122 licenses being cancelled in February.
Citing the DoT's plea for more time, Justice Singhvi pulled up the government for not informing the court that only a portion of the airwaves are being put up for sale. Refusing to accept the government's affidavit filed by an under secretary-level officer in the 2G case, the apex court directed the centre to submit a fresh one within two days by the DoT secretary, the court said.
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