India faces new hyper-competitive spectrum bid

Dylan Bushell-Embling
07 Jan 2015

The Indian government will include only 5-MHz of 3G spectrum in the auctions planned for February, leading to concerns that bid prices for the spectrum will skyrocket.

The Union cabinet has decided to auction only 5 MHz of 2.1-GHz 3G spectrum along with the 800-MHz, 900-MHz and 1,800-MHz 2G bands due to be auctioned, the Indian Express reported.

A 10MHz block of 2,100-MHz spectrum will be auctioned at a later date, expected to be sometime in May.

The 15MHz of 3G spectrum is being freed up by the Defence Ministry as part of a spectrum swap agreement signed in 2009, but the process for freeing up the spectrum has been delayed.

The plan to auction only 5MHz of 3G spectrum is counter to the recommendation by telecom regulator Trai to auction all 15-MHz of 3G spectrum simultaneously with the 2G airwaves.

During the 3G auctions of 2010, spectrum scarcity led to sky-high bids, with prices reaching more than five times the 35 billion rupee reserve price.

Operators are still struggling with high debts accrued from the auction, the concurrent wireless broadband auction and the reauction of spectrum from the 2G licenses cancelled in 2012.

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