The empowered group of ministers (EGoM) on telecom, headed by Finance Minister P Chidambaram, is likely to put 34 blocks in the liberalised 900-MHz band up for auction in the Delhi, Mumbai and Kolkata circles.
The blocks, of 1.25 MHz each, would be sold in the next round of auctions, to be held by March this year. This would ensure at least 5 MHz, or four blocks of 1.25 MHz each, for a new entrant.
Liberalised spectrum is the radiowaves won in an auction and can be used to offer any service. The spectrum telcos currently have is the so-called administered spectrum that can be used only for a certain service using a certain technology.
According to telecom analysts, the move could attract bids from companies like Reliance Infotel, which has already bought spectrum in the 2,300-MHz band. Owned by Mukesh Ambani-led Reliance Industries, the company has announced plans to roll out fourth-generation (4G) services this year.
The 900-MHz band is considered more efficient for high-speed data services. The lower the frequency of a radiowave band, the higher the signal strength and reach. This means fewer base stations and towers would be needed. Companies providing WiMax services would also be interested in the liberalised 900-MHz band.
EGoM is scheduled to meet tomorrow to discuss the matter. DoT plans to put 15 MHz of spectrum in the 1,800-MHz band in Delhi and Mumbai up for auction at base prices of Rs 485.15 crore and Rs 474.92 crore a block, respectively. In November, the government had offered only 10 MHz of the radiowaves in these circles, at reserve prices of Rs 693.06 crore and Rs 678.45 crore, respectively.
In Rajasthan and Karnataka, 11 blocks of 1.25 MHz each would be auctioned at reserve prices of Rs 46.96 crore and Rs 231.08 crore, respectively. Operators would be allowed to buy up to 25 per cent of all spectrum assigned in different blocks.
According to an EGoM draft note, incumbent operators like Bharti Airtel and Vodafone India, whose licences come for renewal in 2014, would be considered new players.