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DoT defers spectrum auction

New Delhi, Dec. 28: The department of telecom has deferred spectrum auction by 10 days from the original schedule to February 3.

The government will auction airwaves in the 900 and 1800 megahertz frequency bands in the auction and interested firms will have to apply on or before January 15, instead of January 4 as advertised earlier in the notice inviting applications (NIA), the DoT said.

The telecom department will publish a final list of bidders on January 29 and hold a mock auction on January 30-31, it said.

No reasons were cited for the delay in the auction process crucial for telecom giants such as Bharti and Vodafone, which are hoping to buy back airwaves they are using now.

However, sources said the government was giving itself time to consider telecom firms’ demand for a flat spectrum use charge.

“The clarifications (sought by the industry) to the notice inviting applications will now be issued on January 2. Industry has demanded more time to prepare for the auction. The auction will start from February 3,” a DoT official told a news agency.

Current calculation formula is based on slabs. When an operator buys fresh spectrum, he moves to a higher spectrum usage charge (SUC) slab. SUC is charged on revenue earned by a telecom firm and is in slabs that attract 3-8 per cent charges.

COAI, telecom firms’ lobbying outfit, had warned that unless a flat spectrum use charge was decided, the firms would not have enough incentive to buy fresh airwaves on which mobile calls travel.

Rajan S. Mathews, director-general of COAI, had said at a pre-bid conference held last week: “Failure of the DoT to clarify if they will be able to take a decision on the implementation of a flat spectrum use charge before the auction date will be near fatal to the success of the upcoming auctions.”

Earlier this week, telecom firms, including Bharti, Vodafone, Idea and MTS, had written to the Prime Minister asking for a decision on spectrum charges before the auctions were held.

The government wants to raise some Rs 40,000 crore from selling spectrum. In the beginning of this month, the government had fixed a floor price for auction that was 25-30 per cent lower than a previous failed auction with a benchmark of Rs 1,764.79 crore for one MHz of pan-India spectrum in the 1800 MHz band.

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