Govt allows foreign firms to bid for 3G auction

The government on Saturday said foreign firms would be allowed to bid for spectrum for third generation mobile services and will start auctioning the radio waves from 14th January, 2010.

"Interested foreign entities are allowed to participate in the auctions directly and apply for licences subsequently," the revised Information Memorandum, giving details about eligibility criteria and time schedule said.

Foreign entities can operate telecom services in India only through an Indian subsidiary with not more than 74 percent foreign share holding, subject to the approval of the Foreign Investment Promotion Board (FIPB).

The Department of Telecom (DoT) has said the auction of 3G spectrum would be carried out in four stages -- invitation stage, pre-qualification, auction and grant of spectrum.

The DoT would hold a pre-bid conference on 16th November and the mock auction would be conducted on 11th-12th January next year.

"The auction of 3G spectrum would start on 14th January, 2010," the DoT said, adding that this is an indicative time schedule and subject to revision.

According to the revised schedule, there is a slippage of over two weeks compared to the original plan as announced by the Empowered Group of Ministers.

The revised memorandum also gives details on the spectrum charges the successful bidders have to shell out over and above the spectrum acquisition fee.

An annual spectrum charge would be levied on the total adjusted gross revenue of 2G and 3G services taken together.

However, there would be a moratorium of one year on the payment of annual spectrum charges for the standalone 3G operator.

No moratorium would be applicable to the existing operators holding both 2G and 3G spectrum.

Stating the roll-out obligation, the memorandum said, in the metros, the licensee to whom the spectrum is allocated shall be required to provide service in at least 90 percent of the area, within five years.

The memorandum has also given details of the number of blocks available in each circle for auction.

The Empowered Group of Minister had earlier said five blocks of spectrum would be auctioned in each circle with one block reserved for the state-run telecom firms BSNL and MTNL.

However, there is no block available for auction in Rajasthan and North East.