DoT Quiet on Telecom Auction Failure Questions + Considering Extra Spectrum Fees on Existing Operator

With Spectrum Reserve price for the Top 6 Circles being High and Extremely High for the Top 2 circles, Spectrum Auction may fail in Delhi and Mumbai Circles. Prospective bidders posed a question to the DoT that in case the Government objectives for auction as highlighted viz. to obtain a market determined price is not met in terms of all spectrum slots being not taken up at reserve price then does the Government propose to conduct a re?auction with a lower reserve price ? DoT avoids answering the question.

Tug of War – New Operators Vs Old Operators Existing / Incumbent Operators have a much lower cost structure for spectrum, pan India spectrum price being allotted at Rs.1,658 crores against potential new entrants where the base price itself is Rs 14,000 Cr. How does DoT plan to address the aforesaid level playing field issues ?
DoT said that it is considering a levy of one time charge for spectrum currently held by existing operators. This assures consumers that their is no room for tariff cut in the near future.

In a Liberalized Environment, DoT allows switching of Technology In case of change of technology [Say you want to switch from CDMA to GSM], Coverage, provisioning, delivery, quality and continuity of services in the network deployed with earlier technology are not disturbed. Operator may fulfill the remaining part of rollout obligations with later technology as per test schedule / procedure for that technology.

Stay tuned for more updates on who are the potential bidders 🙂

Update on 08/10/2012
9.75% Interest on Deferred Payment of Spectrum – The DoT in its Notice Inviting Application for Spectrum Auction has proposed to charge operators 9.75% interest annually should they chose to make staggered payment for spectrum won in the forthcoming auction. Recall that the DOT on advise of TRAI has given operators the option to pay 33% of spectrum price upfront, with the remaining paid in 10 equal annual installments, after a 2 year moratorium.