The third generation (3G) spectrum pre bid conference kicked off in New Delhi on Monday, placing some clarity in the auction process.
The Department of Telecommunications (DoT) organised a conference on third generation (3G) spectrum in New Delhi on Monday to explain the auction and bidding process for the said spectrum. The process, slated to take off on January 14, 2010, will be carried out in four stages: invitation, pre-qualification, auction and grant of spectrum.
The India 3G auction had been pending for a long time and the final date was announced only in October. DoT has said that December 21 is the last date for applications for companies who are planning to take this auction. The auction will enable operators to offer better voice quality, improved mobile broadband speed and richer value added services.
At the conference, DotEcon Ltd's Dan Maldoom, an economic advisor to companies and regulators, explained that the auction is divided into two stages - the clock stage and the frequency identification stage.
In the clock stage, there will be simultaneous bidding for slots in each of the stated circles (regions of operation) where the spectrum is available. At the end of this stage, for each circle, each bidder's highest bid made so far in any round will be reserved. The provisional winning price associated with these bids will be equal to the lowest price at which the provisional bidders submitted their bids.
The second stage or the frequency identification stage will allocate specific frequency blocks to successful bidders in circles where they have won a slot in the clock stage.
For the 3G auction, the government has decided to auction 20 MHz of spectrum in the 2.1GHz band in the telecom service areas where 25 MHz or more paired spectrum is available. Blocks have been reserved for BSNL and MTNL in their service areas.
DoT has kept reserve prices for the auction at Rs 320 crore for Delhi, Mumbai and Circle A (Maharashtra, Andhra Pradesh, Gujarat, Karnataka, Tamil Nadu), Rs 120 crore for Kolkata and Circle B (Kerala, Punjab, Haryana, Uttar Pradesh (W), Uttar Pradesh (E), Madhya Pradesh, West Bengal) and Rs 30 crore for Circle C (Himachal Pradesh, Bihar, Jammu and Kashmir, Orissa, Assam).
At the conference, Maldoom also spoke on the scheduling of the auction process. He said that there is a default timetable for clock rounds, which goes on from Monday till Friday between 9 am and 5.30 pm. If any bidder fails to submit the bid on time, the system automatically triggers a time extension. The bid will be carried out through an electronic auction system.
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