India 2G re-auction won't meet deadline

India's telecom department says will need longer than four-month deadline to complete resale of 2G licenses, after Supreme Court revoked 122 permits allotted since 2008 amid graft allegations.

India's Telecommunications Department (DoT) tells Prime Minister Manmohan Singh that the process of re-auctioning 2G licenses will take more than 13 months. This means it will not be able to meet the four-month deadline set by the Supreme Court, which earlier this month revoked all 122 permits that were allotted since 2008 on grounds of alleged graft.

The Economic Times reported Saturday that a senior DoT official said, during a presentation to the PM and other senior cabinet ministers, the 3G auctions had been completed in 688 days and it plans to carry out the 2G bandwidth sale in 400 days.

The department is also seeking the Supreme Court's approval to extend the deadline for finishing the auction process, the report said. The country's telecom regulator, TRAI (Telecom Regulatory Authority of India) is expected to issue its recommendations on the auction within the next 60 days, it added.

According to DoT, it will need 95 days to study the proposals from the Telecom Regulatory Authority of India, fix the reserve price for bandwidth sale in consultations with other ministries, and get approvals from ministers looking into all spectrum-related issues. After that, it will take another 245 days to complete the auction process.

It added that the government must take a call on the quantum of spectrum to be sold, the number of blocks--whether on a per MHz basis or in 1.8 MHz or 4.4 MHz blocks--and if incumbents and new players, which do not have a presence in in India, can take part in the sale process.

Other issues such as the fate of mobile permits issued between 2001 and 2007 and whether incumbents should be charged for airwaves they already hold, will have to be addressed as well, the Economic Times reported.

On Feb. 2, the Indian Supreme Court ruled that the government had erroneously issued 2G licenses on a first-come-first-serve basis, and revoked all 122 license agreements issued since January 2008--during the tenure of former Telecom Minister A. Raja--amid allegations of fraud in their allocation. Existing 2G licenses can continue operating for four months, after which the government must put the licenses back up for re-bidding, it ordered.

The decision has thrown India's telecom regulatory standards into question, and met with dismay from telecom operators, including Uninor--a joint venture between Norway's Telenor and local real estate company Unitech Group--which said it was being "unfairly treated" as it had followed government procedures, the Wall Street Journal reported then.

Last week, India outlined a new telecommunications policy to replace the last one made in 1999, which included new regulations on spectrum limits and also separate telecom licenses from bandwidth ones.