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Telecom spectrum auction further delayed

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NEW DELHI: The spectrum auction which has been put off from time to time will begin on 3 February 2014. The Department of Telecom (DoT) had been asked to give clarifications to a number of questions from mobile phone companies like Bharti Airtel and Vodafone India on spectrum usage charges, option of withdrawing from auction and availability of contiguous spectrum but there is still no clarity on these issues.

According to a notice issued today, the DoT will now give clarifications on the concerns raised by service providers on 2 January. The department has also extended the last date for operators to submit their applications to bid in the auction to 15 January.

While DoT will announce the pre-qualification of bidders by 25 January, bidders will also be given an option to withdraw their applications, according to the changes in the auction schedule. Service providers had objected to DoT's move to remove the option of withdrawing their bids, as was allowed in the last auction.

Operators will now be allowed to withdraw their bids by 27 January and the final list of bidders will be announced on 29 January. A mock auction will be conducted over 30 and 31 January.

Leading operators like Bharti Airtel and Vodafone India had warned DoT in a pre-bid conference held last week that they could stay away from the upcoming bandwidth auctions if the government continued with the present cascading spectrum usage charge (SUC) regime, instead of moving to a flat fee structure of 3 per cent.

The government levies SUC between 3-8 per cent of revenue earned by telecom companies from telecom services, depending on the quantum of airwaves held.

The telecom department is set to auction 403 Mhz in 1800 Mhz and 46 Mhz in the 900 Mhz bands in the next round of auctions, beginning 23 January. The government aims to raise Rs 40,874.5 crore from spectrum revenue this fiscal year ending 31 March 2014, including one-time spectrum fee, and has its hopes pinned on this round to raise funds to limit its budget deficit.

Operators stayed away from the last two rounds held in November 2012 and March 2013 citing very high reserve prices and low spectrum availability. The government has set the reserve price in 1800 Mhz at Rs 1,765 per unit for pan-India airwaves, 25 per cent lower than the last auctions.

DoT also lowered the reserve price for Delhi, Mumbai and Kolkata circles in 900 Mhz band by 53 per cent from last auctions to Rs 360 crore, Rs 328 crore and Rs 125 crore respectively.

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