In a show of defiance, the department of telecommunications (DoT) is going ahead with the process of 3G telecom auction, despite the reservation expressed by the ministry of finance.
Invites request for proposal to select agency to conduct e-auction l DoT says auction won’t be halted despite finance ministry objection
NEW DELHI: In a show of defiance, the department of telecommunications (DoT) is going ahead with the process of 3G (third generation) telecom auction, despite the reservation expressed by the ministry of finance.
Just a day after finance secretary D Subbarao wrote to DoT secretary Siddharth Behura that the communications ministry had deviated from the norm by not consulting the ministry of finance on 3G spectrum pricing issues, DoT has invited ‘request for proposal’ (RFP) to kick off the 3G auction process.
Through a notice issued on Thursday, DoT set the ball rolling for selecting an agency for conducting e-auction of spectrum for 3G and broadband wireless services across the country.
After the issue of RFP on August 18, there would be a pre-bid conference on August 27, followed by submission of bids and selection of eligible bidders on September 3, and opening of financial bids of technically qualified bidders on September 19.
For conducting the e-auction, the agency could be an Indian company, a foreign firm incorporated outside the country or a joint venture. But it should not have any equity, directly or indirectly, in any telecom or internet service provider. Also, no telecom or internet service provider shall have any equity in the bidding organization. On the date of application, the bidder must have a paid-up capital of Rs 10 crore and a networth of Rs 25 crore.
Another eligibility condition for the bidder is that it must have experience of conducting at least five e-auctions in the last three years, and the value of these e-auctions should be at least Rs 2,500 crore.
Those who have conducted e-auctions of spectrum of telecom licences in the last five years could be given preference.
Meanwhile, DoT on Thursday said that the 3G policy announcement was made after due consultations with the ministry of finance, and that there has been no departure from the Cabinet decision of 2003.
Subbarao’s letter to Behura referred to the Cabinet decision of 2003 that spectrum pricing has to be decided “mutually between DoT and ministry of finance”.
The Cabinet decision was aimed at providing “incentive for efficient use of spectrum as well as disincentive for sub-optimal usage”.
It is learnt that Behura replied to Subbarao’s letter on Thursday, saying that the ministry of finance is questioning the procedural aspects of the 3G spectrum auction even though DoT consulted it for the same.
Communications minister A Raja has claimed that 3G auction would be on scheduled time, and that there won’t be any deviation from the announced guidelines. 3G is about accessing fast data and surfing the Net on your mobile handset.
The ministry of finance has not been consulted even though the 3G policy guidelines “contain clauses with financial implications,” finance secretary D Subbarao is understood to have conveyed to DoT secretary Siddharth Behura in a stern letter on Wednesday.
The finance ministry has specific objection to the DoT fixing the reserve price of auction, determining the spectrum usage charges and announcing penalties for hoarding of spectrum.
The letter from the finance secretary is not the only one that DoT has received in criticism of its 3G guidelines.
Nripendra Misra, chairman of the Telecom Regulatory Authority of India (Trai), also wrote to Behura recently against the 3G norms.
According to Misra, the DoT decision to allot spectrum to CDMA (code division multiple access) players without an auction is against the principles of equality.
Misra also said that since various service providers have been given licences in different service areas at different time periods, keeping the subscriber base as the criterion for deciding the priority of spectrum allotment “shall go against the level-playing field and the principle of equity.”
The 3G policy was announced in the backdrop of scarce spectrum or airwave. The number of operators in a circle would depend on spectrum availability, DoT had said.
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