MoD 3G talks yield results, but no changes to February auction

21 Nov 2014

Discussions between the Department of Telecommunications (DoT) and the Ministry of Defence (MoD) regarding 3G spectrum currently held by the latter have finally begun to bear fruit, the Economic Times writes. The MoD has agreed to hand over 5MHz of 3G spectrum in 17 circles, following a recent meeting between telecom minister Ravi Shankar Prasad and defence minister Manohar Parrikar, but negotiations are ongoing regarding a potential exchange of a further 15MHz of 3G frequencies in all 22 circles, for spectrum in the 1900MHz band. As such, DoT officials explained that the 5MHz that the MoD has agreed to vacate will not be included in the February auction, as the Telecom Regulatory Authority of India (TRAI) had recommended: ‘It doesn’t make economic sense for the government to auction one slot of 3G spectrum in February and then another three slots in May.’ The February auction cannot be delayed, the DoT noted, as the government has budgeted revenues of INR93.55 billion (USD1.508 billion) from the sale of 2G frequencies for this fiscal year: ‘The government has fiscal compulsions to hold the 2G auctions this fiscal [year]. We can’t postpone it beyond the fiscal [year] to hold a simultaneous auction as suggested by the regulator.’ As previously noted by CommsUpdate, the TRAI recommended earlier this month that the February auction be delayed until more spectrum was available. The proposal was rejected and the TRAI instructed to draw up fresh recommendations on pricing for the available airwaves.