TRAI rethinks minimum bid size, status of expiring operators for spectrum auction

The telecom regulator has opened up for discussions two crucial aspects of the upcoming spectrum auctions in the 900 and 1800 MHz band — the minimum bid size and the status of expiring licensees as new or old.

While in the last auction, the minimum bid size in the 900 MHz band was kept at 5 Mhz for new and expiring licensees, in the upcoming auctions, there would be several such entities who would be forced to bid for whatever spectrum they could.

“However, the requirement of bidding for a minimum of 5 MHz of spectrum in the 900 MHz band needs to be reconsidered due to the practical constraints. This is vital to some of the service providers. One possible solution could be that the block size may be kept as 1 MHz. However, the bidders may be allowed to bid for a minimum of a smaller quantity (say 3 MHz) of spectrum (instead of 5 MHz). Another way could be to keep the minimum bid as 5 blocks (i.e. 5 MHz) in all LSAs except in West Bengal and NE LSAs where the minimum bid is reduced to 3 blocks instead of 5,” TRAI said in its consultation paper on the subject.

On stipulation that expiring licensees should be considered new entrants, TRAI said: “If the condition that a new entrant is required to bid for a minimum of 25 Blocks (i.e. 5 MHz) in the 1800 MHz band, is retained and the licensees, whose licences are due for renewal, are treated as new entrants (as was done in the last auction) then these licensees will be able to bid in only those areas where spectrum to be put for auction is 5 MHz. As these licensees have already acquired spectrum in some of the LSAs; therefore, treating a renewal licensee as a new entrant may not be justified in respect of these licensees,” it noted.

TRAI also noted that Idea Cellular must win spectrum in 2 circles, Vodafone in three and Reliance in seven to ensure continuity of services.