3G sale could spread over weeks

Telecom honchos may not be able to take a summer vacation this year, as the 3G (third generation) and broadband wireless access (BWA) auctions could keep them busy through the season.

It could take a couple of weeks for the 3G bidding to be completed, and BWA auction, which would begin after the close of 3G auction, could take even longer, people close to the development indicated.

The auction process would be held from 9 am to 7.30 pm on all days of the week, except Sunday.

The entire process could stretch much beyond a month, given the large number of participants in the Indian market.

3G auction is slated to begin on April 9. Before the final result is put in the public domain, the government’s approval has to come as well.

The government is targeting Rs 35,000 crore worth of revenue from this auction. While the pan-India reserve price for 3G auction is Rs 3,500 crore, that for BWA is Rs 1,750 crore.

A presentation made by the auctioneers, NM Rothschild and dot.econ, showed the nuts and bolts of the online 3G auction process that will take off this Friday. While the telcos were taken through a mock auction process on Monday, sessions were conducted for the media on Tuesday to explain the modalities.

Representatives of the auctioneers had answers to almost all the technical questions, barring one — how long will the auction take?
The time taken would depend on so many factors, including the level of bidding, the breaks taken between the rounds of bidding, and other hurdles like fire in the building or even systems failure faced by telcos, among others.

There’s no deadline set by the government or the auctioneers for when the auction process should be completed, said Dan Maldoom of dot.econ.

Around the world, auctions take from a few days to a few weeks, said Rothschild’s Sanjay Bhandarkar. But, in some cases, they could drag on. The longest auction so far has been in New Zealand, stretching to as many as 18 months, pointed out Maldoom.

The important points to remember: It will be a simultaneous online auction of 22 service areas in an ascending order over a secure website; the bidding will be held through multiple round clock auction; bid price will be increased through a rule; provisional winners will be announced after each round; bidding activity requirement tightens in stages; all service areas remain in play till the very end; auction ends when the demand is no more than the slots put on auction; measures put in place to frustrate coordinated outcomes; the bid data will be made public after the auction is completed; and bidders can have only one computer logged in at any one time.

There are a total of 20 applications — nine for 3G and 11 for BWA.
Bharti Airtel, Vodafone Essar, Reliance Communications, Idea Cellular, Tata Teleservices, Aircel, Etisalat, S Tel, and Videocon have submitted their applications for participating in the 3G auction. The companies to have applied for BWA auction are Bharti Airtel, Vodafone, Reliance Communications, Idea Cellular, Aircel, Tata Communications Internet Services, Qualcomm, Spice, Tikona, HFCL, and Augere (Mauritius).

India’s entry into 3G, or high-speed internet access and multimedia services on mobile handsets, is coming at a time when the country has over 600 million phone subscribers.
The second-largest telecom market by subscribers after China, India adds over 15 million mobile users every month.