Notice issued for 2G applications

DoT on Friday issued the notice inviting applications, or NIAs, to potential bidders in the upcoming 2G auctions. The NIAs will be followed by bid applications from interested parties till October 19. DoT will publish ownership details of bidders on October 21 and expects to have a list of pre-qualified bidders by October 28 and a mock auction on November 7. The 2G auction is expected to start on November 12.

The key provisions of the NIA include:
 Non-refundable entry fee of Rs1 crore per service area
GSM players to pay 33% of 2G bid upfront; CDMA players 25%
Spectrum usage charges at 3-8% for the players
Telco spectrum holding cap @ 25% of total spectrum
Roll out in 10% district headquarters within 3 years
Minimum net worth requirement for bidders is `100 crore
Foreign telcos allowed to bid directly, but FIPB approval mandatory for successful foreign bidders
2G auction bids to be validated till April 30
Regular spectrum audit to be conducted by DoT

Experts said there were no surprises in  the NIA guidelines and most operators are likely to bid.

“However, it is unlikely that any single operator will bid for a pan-India licence,” said Prashant Singhal, partner in member firm of Ernst & Young Global.

“It is also unlikely that there will be any new entrants, but existing foreign telcos are expected to bid. However there is as yet no clarity on whether they will bid alone or with a partner,” said Singhal.

RIL, however, is likely to be a surprise new bidder in the 2G auctions.

All operators, however, are not so enthusiastic about the auctions. Indeed, Idea Cellular and Vodafone have filed a petition in the Supreme Court against the quantity of spectrum being made available in the 2G auctions. While the government had said that all spectrum of cancelled licence holders would be put up for bidding (amounting to 18-25 MHz), only around 14 MHz is now being put up for bidding. The DoT is said to be keeping the rest for refarming. It is expected to hear the petition next week.