3G, BWA auction designed with care
09-04-2010
The full process may take about 45 days
India's auction for 3G and broadband wireless access (BWA) spectrum, that begins April 9, is expected to to take about 45 days. The 3G auction may last about 15-20 days, while the BWA auction might take even longer. Bidding for BWA begins two days after completion of the 3G auction.
During the auction, telcos will have to match DoT's base price, which will be revised at each round. The revisions can range between 10% and 1% over the previous round's price depending on demand. The base price for pan-India 3G airwaves has been fixed at Rs 3,500 crore, while for BWA spectrum it is Rs 1,750 crore. The government will auction three slots of 3G airwaves in 17 telecom services areas and four in the other five. Only two BWA slots will be up for sale
The auction will involve multi-staged bidding that will be conducted online in the nature of an ascending e-auction. The auction process has been designed "to deter collusive bidding". The auctioneer (NM Rothschild & Sons and DotEcon) will present the bids in an ascending order, and the bidders either accept the auctioneer's proposal or decline.
For instance, consider circles such as Mumbai or Delhi where say six telcos are bidding for 3G frequencies. The auction starts with a reserve price of Rs 320 crore in each circle, and if all six telcos decide to bid, the auctioneer would raise the bid sum by 10% at every stage till the difference between the number of slots and bidders is less than three. Thereafter, DoT will keep raising the bid amount by 5% till the difference between the number of slots and the bidders is down to one. At this stage, when four telcos will be vying for three slots, DoT would hike the bid amount by 1% till there is 'equilibrium', resulting in three telcos targeting three slots.
At any stage during the auction, a bidder can pull out from one circle and transfer the bid amount to another circle. The auction will go on till all circles reach an equilibrium state. The auction will come to a halt if during the process of raising the bid amount by 1% a bidder pulls out and the number of slots exceed the number of bidders.
Input from Economic Times
India's auction for 3G and broadband wireless access (BWA) spectrum, that begins April 9, is expected to to take about 45 days. The 3G auction may last about 15-20 days, while the BWA auction might take even longer. Bidding for BWA begins two days after completion of the 3G auction.
During the auction, telcos will have to match DoT's base price, which will be revised at each round. The revisions can range between 10% and 1% over the previous round's price depending on demand. The base price for pan-India 3G airwaves has been fixed at Rs 3,500 crore, while for BWA spectrum it is Rs 1,750 crore. The government will auction three slots of 3G airwaves in 17 telecom services areas and four in the other five. Only two BWA slots will be up for sale
The auction will involve multi-staged bidding that will be conducted online in the nature of an ascending e-auction. The auction process has been designed "to deter collusive bidding". The auctioneer (NM Rothschild & Sons and DotEcon) will present the bids in an ascending order, and the bidders either accept the auctioneer's proposal or decline.
For instance, consider circles such as Mumbai or Delhi where say six telcos are bidding for 3G frequencies. The auction starts with a reserve price of Rs 320 crore in each circle, and if all six telcos decide to bid, the auctioneer would raise the bid sum by 10% at every stage till the difference between the number of slots and bidders is less than three. Thereafter, DoT will keep raising the bid amount by 5% till the difference between the number of slots and the bidders is down to one. At this stage, when four telcos will be vying for three slots, DoT would hike the bid amount by 1% till there is 'equilibrium', resulting in three telcos targeting three slots.
At any stage during the auction, a bidder can pull out from one circle and transfer the bid amount to another circle. The auction will go on till all circles reach an equilibrium state. The auction will come to a halt if during the process of raising the bid amount by 1% a bidder pulls out and the number of slots exceed the number of bidders.
Input from Economic Times
