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DoT: Will finish 2G sale by August 31


2 May 2011
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NEW DELHI: After seeking 400 days to carry out spectrum auctions, the telecom department (DoT) has made a U-turn and said it can complete the sale process well within the August 31 deadline given by the Supreme Court.

The DoT has sent a fresh auction timetable for approval to the Empowered Group of Ministers (EGoM) headed by Pranab Mukherjee that will a take the final call on all issues related to upcoming sale of second-generation, or 2G, bandwidth following the SC order cancelling 122 licences in February.

According to the revised timeline, auction procedures will be completed by July 15, when the information memorandum - the document containing all details of the sale - will be released.

This leaves the department with 15-25 days to conduct the pre-bid conference, issue clarifications, invite applications for the sale process and check compliance. Under this schedule, which was presented to the EGoM on May 2, the government has almost the whole of August to conduct the spectrum sale through auctions. ET reviewed a copy of the telecom department's presentation to the EGoM.

New timeline indicative
During the third-generation, or 3G, spectrum auctions in 2010, the interval between the release of the information memorandum and the beginning of the action process was about three months. Last month, the Supreme Court ordered the government to conduct 2G spectrum auctions and grant new licences by August 31, rejecting the Centre's plea that it needed 400 days to complete the process. The apex court also allowed the nine mobile companies whose licences were cancelled to continue operations till September 7, extending its earlier deadline of June 2.

A top DoT official told ET that the "revised timeline presented to the EGoM was only an indicative schedule and could not be considered as final". The official added that the 'indicative timeline' could not be compared to the DoT's earlier demand for 400 days as it was expediting the sale process.

Even as the DoT takes steps to complete the auctions within the August 31 deadline, the quantum of airwaves to be sold is yet to be finalised. Last month, sector regulator Trai had recommended that the government auction 5 MHz of airwaves in the 1800 MHz, a quantum sufficient for only one company to operate though nine companies have lost licences after the Supreme Court order.

Earlier this week, the Telecom Commission, the highest decision-making body of the telecom ministry, declined to endorse Trai's suggestion that only a single slot of airwaves be auctioned and sought clarity from the regulator on the issue. The regulator must provide clarity and respond to the department's queries by May 7 under the revised auction timeframe.

The government, in its review petition in the apex court, had said the entire auction process would take 400 days and asserted that 95 of these would be taken up for studying the regulator's proposals, fixing the reserve price for bandwidth in consultation with other ministries and getting approvals from the EGoM looking into all spectrum-related issues. After this, the DoT estimates, it would require an additional 245 days for completing

But under the revised schedule, the EGoM will fix the reserve price, the number of slots and other issues related to the sale process by May 18. It has also shrunk the 245-day requirement to complete the auction process to a third to meet the August 31 deadline.

Tender for selecting auctioneer issued
The telecom department on Thursday issued requests for proposal (RFPs) for selecting the auctioneer. Companies must submit bids by June 11 and the auctioneer will be finalised on June 20, according to the RFP proposal.

While Trai had proposed that the auctioneer be retained for subsequent spectrum sale process till 2015, the DoT has limited the RFP to the upcoming auction in the 1800 MHz band.

International auctioneers and merchant bankers from Asia, Europe and the US are likely to submit bids. In 2010, NM Rothschild & Sons and auction consultant DotEcon won the bid to conduct the 3G and broadband wireless ( BWA) auctions. The duo is learnt to be in the race for conducting the current sale too. Other bidders could include Morgan Stanley and Deutsche Bank.

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