If everything goes to plan, the auction of spectrum in 800/900/1800MHz band will start on 11 March. This time round the focus will be on the metropolitan cities of Delhi and Mumbai where there was no bidding in the November auctions. The big question is whether the government will be able to make the most of it?
The real action will be in the 900MHz band where Bharti Airtlel, Vodafone and Loop Mobile will have to bid to ensure that they retain spectrum. At the base price alone, 900MHz spectrum in Delhi, Mumbai and Kolkata will yield the government Rs 25,000 crore.
There should be bidding in the 800MHz band since base rates for the auction have been halved by the Cabinet. So a national licence starts at Rs 9,100 crore. But, it seems unlikely that even Sistema Shyam Teleservices will bid for a national licence. In all propbability, it will bid for 6-7 key circles.
While the 900MHz band is part of the re-farming exercise, the 1800MHz spectrum in Delhi, Mumbai, Karanataka and Rajasthan is on offer since there were no bidders in the November 2012 auctions. To ensure that there is bidding this time round, the government has reduced the base prices by 30 per cent. Yet Norway's Telenor has sought a 50 per cent cut in the rates, quite in line with what the government did for the 800MHz band.
Not that the cut has satisfied SSTL. In fact, the Association of Unified Telecom Service Providers of India (Auspi) has sought a 75 per cent cut.
That remains to be seen. But action for spectrum will start soon. Tariffs for subscribers should rise in accordance with how much more operators pay for spectrum. What it essentially means is that the days of cheap mobile telephony are coming to an end. Unless of course the government allows domestic connectivity on internet protocol. That would lead to a bloodbath.
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