DoT’s draft guidelines have been issued almost two years after the Telecom Regulatory Authority of India (TRAI) submitted its recommendations on 3G services. Significantly, TRAI and DoT have differing views on the 3G policy. While TRAI wants only the companies with licences to participate in the bidding process, DoT wants even those which do not have licences to bid.

If the draft guidelines are finalised, both existing and new players will be allowed to participate in the bidding. DoT officials think this would encourage competition, and would help in realizing optimum revenue from auction of spectrum. The guidelines also recommend 3G licences be given for 20 years, in line with the existing telecom licences. This will help operators raise funds for the project.

Auction will be for five blocks of spectrum of 2x5 MHz each in each telecom circle in the 2.1 GHz band. One bidder will not be allowed to bid for more than one block of spectrum. Details on the eligibility of bidders are yet to be finalised.

The current foreign investment guidelines put a ceiling of 74 per cent on foreign equity in a telecom service provider. Same guidelines would be followed in 3G services, said a DoT official. Therefore, there will be no specific mention of foreign players in the final guidelines, said an official.

Communication and IT Minister A Raja had recently said that additional players might be allowed to participate in 3G spectrum auction, and additional players might not necessarily be foreign players.

Earlier, finance ministry had suggested ‘International Competitive Bidding’ for realizing optimum revenue from auction of spectrum. The draft guidelines, by allowing even those companies not having licences to participate in the bids, are in line with finance ministry’s recommendations that include both foreign and additional domestic players. “All entities who fulfill the criteria for obtaining a UAS licence can bid for 3G spectrum,” the draft guidelines said.

DoT is likely to announce the final guidelines soon. The auction process may begin in a month after.

The disconnect

•TRAI and DoT have differing views on the 3G policy.

•TRAI wants only those firms that already have licences to participate in the bidding

•It thinks existing players already have infrastructure that would reduce costs

•DoT wants even those which do not have licences to bid

•It thinks this would encourage competition, and fetch more revenue from auction