It could be curtains for the clutch of new telecom Companies planning to bid for 3G licences. The draft auction plan, prepared by the department of telecommunications for each circle, puts the new and smaller players at a disadvantage.
The department will auction five licences for each circles. Companies planning to bid for the 3G licences include NTT
DoCoMo, AT&T and Deutsche Telecom. Big domestic real estate Companies like Unitech and Videocon have also submitted bids.
The draft auction plan states that if there is a tie between bidders, the one with a higher subscriber base will go through to the next round at the expense of the one with a lower base, which will be put on the waitlist.
If the subscriber bases of two bidders are the same, then the one with the higher adjusted gross revenue in the quarter prior to the auction would continue, while the other bidder would move to the waitlist.
Similarly, the DoT plan says if there is a tie between bidders where one of them happens to be an existing service provider in the concerned service area, the company should be permitted to participate in the next round as the existing one can roll out the network faster.
This means new telecom players who do not have a licence to operate services would be at a disadvantage vis-à-vis the incumbents in the bidding. Among the existing players, the ones with a higher subscriber base and network spread would have an advantage over smaller players.
The move is sure to be resented by the new and smaller players because in the light of a 2G-spectrum crunch, these players have banked on the 3G services to enter the field.
As is known, initially, only 25 Mhz spectrum would be available for bidding, with five players getting 5 Mhz each.
SOURCE:
The Financial Express
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