In the case of the 3G Auction, the Government has decided to auction upto 20 MHz
of paired spectrum in the 2.1GHz band in the telecom service areas where 25 MHz or more paired spectrum is available. In such cases, four blocks of 2X5 MHz will be
auctioned in addition to one block being reserved for BSNL/ MTNL. In telecom
service areas where less than 25 MHz paired spectrum is available in the 2.1GHz
band, the actual amount of available spectrum in blocks of 2X5 MHz will be
allocated, with one block being reserved for BSNL/ MTNL.
Indicative details of the number of 2x5 MHz 3G Spectrum blocks that will be
auctioned are provided by service area in the following table:
In the case of the 800MHz Auction, the Government intends to auction one block of
2x1.25 MHz spectrum in each of the circles where atleast two carriers of 2x1.25 MHz
are available. Details of the number of 2x1.25 MHz spectrum blocks being auctioned
are provided in the following table:
In case of spectrum to be awarded in the BWA Auction, the Government intends to
auction 2 blocks of 20MHz unpaired spectrum in each of the 22 service areas4 in the
2.3GHz band. Details of the number of 20 MHz unpaired BWA Spectrum blocks that
will be auctioned are provided by service area in the following table:
3G Spectrum
The Government has allocated one block of 2x5MHz of spectrum in Mumbai and
Delhi for MTNL and one block of 2x5MHz of spectrum in the remaining service
areas for BSNL. BSNL and MTNL shall not be participating in the Auctions, but will
be required to match the Winning Price achieved in the in the respective service areas
in the 3G Auction, as consideration for the spectrum.
BWA Spectrum
The Government has allocated one block of 20MHz of unpaired spectrum in Mumbai
and Delhi for MTNL and one block of 20MHz of unpaired spectrum in the remaining
service areas for BSNL. BSNL and MTNL shall not be participating in the Auction,
but will be required to match the Winning Price achieved in the respective service
areas in the BWA Auction, as consideration for the spectrum.
The frequencies that have been allocated for use by MTNL/ BSNL in the various
service areas are tabulated below:
Eligibility criteria to participate in the Auctions
3G Auction
Any entity:
(i) that holds a UAS/ CMTS licence; or
(ii) that:
(a) has previous experience of running 3G telecom services either
directly or through a majority-owned subsidiary; and
(b) gives an undertaking to obtain a UAS licence through a New Entrant
Nominee UAS Licensee as per DoT guidelines before starting
telecom operations
can bid for 3G Spectrum (subject to other provisions of the Notice).
For the purpose of Clause 5.1.1(ii)(a), a wholly and directly-owned company shall be
entitled to use the qualifications of its owner.
800MHz Auction
Any existing UAS licensee that offers CDMA services in any telecom service area
(“UAS-CDMA operator”) can bid for 800MHz Spectrum (subject to other provisions
of the Notice) in that telecom service area.
BWA Auction
Any entity:
(i) that holds a UAS/ CMTS licence; or
(ii) that holds an ISP licence (category ‘A’ or ‘B’); or
(iii) that gives an undertaking to obtain a UAS licence through a New Entrant
Nominee UAS Licensee as per the DoT guidelines before starting telecom
operations; or
(iv) that gives an undertaking to obtain an ISP Category ‘A’ licence through a
New Entrant Nominee ISP Licensee as per the DoT guidelines before starting
telecom operations
can bid for BWA Spectrum (subject to other provisions of the Notice).
Auction of 3G and BWA Spectrum – Revised Information Memorandum
39
Successful Bidders in the BWA Auction that currently hold an ISP-category ‘B’
licence will be required to migrate to an ISP-category ‘A’ licence, at no additional
cost, before they are awarded the BWA Spectrum.
For the sake of clarity, the DoT guidelines stipulate that a UAS licence or an ISP
licence can only be awarded to an Indian Company9. Hence, foreign applicants will
need to form an Indian subsidiary to obtain a UAS licence or an ISP-category ‘A’
licence. However, they are allowed to participate in the Auctions directly and apply
for a licence subsequently through an Indian subsidiary.
It is clarified that services can only be offered as per the terms of the licence obtained
by the operator. Award of spectrum does not confer a right to provide any telecom
services, and these are governed by the terms and conditions of the licence obtained
by the operator.
Prospective New Entrants
Prospective Bidders who do not have a UAS/ CMTS licence (for the 3G Auction) or a
UAS/ CMTS/ ISP (category ‘A’ or category ‘B’) licence (for the BWA Auction) (the
“Prospective New Entrants”) shall be permitted to enter either of these Auctions
subject to the provisions of Section 5.1. However, it is clarified that a Prospective
New Entrant who is pre-qualified or is declared a Successful Bidder shall not be
automatically awarded a UAS licence or an ISP-category ‘A’ licence, as applicable.
Prospective New Entrants are advised to ensure that they satisfy the conditions for the
award of a UAS licence or an ISP-category ‘A’ licence, as applicable. This includes
the relevant provisions for making an FDI into the telecom services sector in India.
In the 3G Auction, if the Successful Bidder is a Prospective New Entrant, the
spectrum shall be assigned to it or to a Company nominated by the Successful Bidder,
which acquires a UAS licence in the relevant service areas and where the Successful
Bidder has a minimum holding of at least 26% (directly or indirectly) (“New Entrant
Nominee UAS Licensee”). In such a case, both the Successful Bidder and the New
Entrant Nominee UAS Licensee shall be jointly and severally liable for the
performance of the bid obligations.
In the BWA Auction, if the Successful Bidder is a Prospective New Entrant, the
spectrum shall be assigned to it or to a Company nominated by the Successful Bidder,
which acquires a UAS licence in the relevant service areas and where the Successful
Bidder has a minimum holding of at least 26% (directly or indirectly) or to a
Company nominated by the Successful Bidder, which acquires an ISP-category ‘A’
licence in the relevant service areas and where the Successful Bidder has a minimum
holding of at least 26% (directly or indirectly) (“New Entrant Nominee ISP
Licensee”). In such a case, both the Successful Bidder and the New Entrant Nominee
UAS Licensee or the New Entrant Nominee ISP Licensee shall be jointly and
severally liable for the performance of the bid obligations.
New entrants – foreign entities
Foreign entities are permitted to participate in the Auctions, subject to the provisions of Section 5.1. However, it must be noted that the UAS/ CMTS/ ISP-category ‘A’ licence conditions and the FDI provisions imply that such a foreign entity can operate a telecom service in India only through an Indian subsidiary with no more than 74% foreign shareholding (subject to the approval of the FIPB for the foreign shareholding in excess of 49%).
However interested foreign entities are allowed to participate in the Auctions directly, and apply for a licence subsequently.
It must be noted by prospective Bidders that FIPB approval is contingent on security
clearances and, under certain circumstances, could take considerable time.
Accordingly, such Bidders are advised to initiate the process of getting approvals
from the FIPB at the earliest, as such approvals are available for entities with an
intent to invest as well as those that have already made such investments.
Roll-out obligations
The licensee to whom the spectrum is assigned shall have a network rollout
obligation as detailed in this section. The obligation reflects the need both to ensure the efficient use of spectrum and provide a reasonable level of service to a wide cross-section of customers.
Roll-out obligations for 3G Spectrum and 800MHz Spectrum
Metro service area
The licensee to whom the spectrum is allocated shall be required to provide service in
at least 90% of the service area, street coverage in the relevant service area, within five years of the Effective Date.
Category A, B and C service areas
The licensee to whom the spectrum is allocated shall ensure that at least 50% of the
District Headquarters (“DHQ”) in the service area will be covered, out of which at
least 15% of the DHQs should be rural Short Distance Charging Areas (“SDCA”)10,
within five years of the Effective Date. Further:
the operator shall also be permitted to cover any other town in a District in
lieu of the DHQ;
coverage of a DHQ/ town would mean that at least 90% of the area bounded
by the Municipal limits should get the required street coverage in the relevant
service area;
the DHQ shall be taken as on the Effective Date;
the choice of DHQs/ towns to be covered and further expansion beyond 50%
of DHQs/ towns shall lie with the operator.
The Effective Date shall be the later of the date when the spectrum is allocated and
the date when the UAS licence, if applicable, is granted to the operator.
If the licensee does not achieve its roll out obligations, it shall be allowed a further
period of one year to do so by making a payment of 2.5% of its successful bid amount
(i.e. spectrum acquisition price) per quarter or part thereof as liquidated damages. If the operator does not complete its roll out obligations even within the extended period of one year, the spectrum assignment shall be withdrawn.
Roll-out obligations for BWA Spectrum
Metro service area
The licensee to whom the spectrum is allocated shall be required to provide coverage
in at least 90% of the service area, street coverage in the relevant service area, within five years of the Effective Date.
Category A, B and C service areas
The licensee to whom the spectrum is allocated shall ensure that at least 50% of the
rural SDCAs are covered within five years of the Effective Date.
The Effective Date shall be the later of the date when the spectrum is allocated and
the date when the UAS licence or the ISP-category ‘A’ licence, as applicable, is
granted to the operator.
If the licensee does not achieve its roll out obligations, its spectrum assignment shall be withdrawn.
Duration
3G Spectrum and 800MHz Spectrum
The right to use the spectrum allocated in the 2.1GHz band or the 800MHz band will
be valid for 20 years, unless revoked or surrendered earlier, subject to the operator
continuing to have a UAS/ CMTS licence. In case the UAS/ CMTS licence is
cancelled/ terminated for any reason, the spectrum shall stand withdrawn forthwith.
If the period of an existing UAS/ CMTS licence of a Successful Bidder is expiring
before the period of expiry of the right to use the 3G Spectrum or the 800MHz
Spectrum, then the UAS/ CMTS licence with respect to the 3G spectrum or the
800MHz Spectrum, as applicable, will get extended to 20 years from the time of
award of the 3G or 800MHz spectrum. However, extension of the right to use any
spectrum other than 3G Spectrum or 800MHz Spectrum associated with the licence
and the terms thereof, will be specified in due course.
BWA Spectrum
The right to use the spectrum allocated in the 2.3GHz band will be valid for 20 years
subject to the operator continuing to have a UAS/ CMTS/ ISP-category ‘A’ licence.
In case the UAS/ CMTS/ ISP-category ‘A’ licence it holds is cancelled/ terminated
for any reason, the spectrum shall stand withdrawn forthwith.
If the period of an existing UASL/ CMTS/ ISP-category ‘A’ licence of a Successful
Bidder is expiring before the period of expiry of the right to use the BWA Spectrum,
then the UAS/ CMTS/ ISP licence with respect to the BWA spectrum, as applicable,
will get extended to 20 years from the time of the BWA spectrum award. However,
extension of the right to use any spectrum other than BWA Spectrum associated with
the licence and the terms thereof, will be specified in due course.
Indicative TIMELINE
Hope it happens this time as per schedule indicated by Department of Telecom
LETS KEEP THE FINGERS CROSS.
END.
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