The government plans to hold another round of auction of 2G and 3G spectrum

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vacated by the defence services. The hope is that this will bring Rs 80,000 crore to the exchequer.

The auctions are likely to begin in three months but the actual timetable will be decided by a min­isterial gr­oup headed by finance min­ister Pra­nab Mukh­erjee.

The telecom departme­nt has circulated a note containing the auction pr­oposal for consideration of the empowered group of ministers. According to the note, a copy of which is wi­th Financial Chronicle, the available spectrum of 20 MHz for 3G will come as follows: 5 MHz in the 1954-1959 MHz band and another 15 MHz in 1900-1907.5/1980-1987.5 MHz.

“We are awaiting responses from all departments to whom the note has been circulated. The process could take up to a month. Thereafter, it will go to the telecom commission for final consideration. It will take into account the views expressed by telecom operators. A final decision could take about two to three months to come,” said a telecom ministry official.

The telecom department estimates that a 20 MHz spectrum for 3G and 20 MHz for 2G will generate as much as Rs 67,002 crore and Rs 12,848 crore, respectively.

Last year the government mopped up Rs 106,262 crore from airwaves auctions. Of this 20 MHz of 3G in the 1959-1979 MHz band brought in Rs 67,719 crore, while broadband wireless access led to an extra revenue of Rs 38,543 crore.

The coming auctions will be transparent and in consonance with the recommendations of a committee, headed by former finance secretary Ashok Chawla, set up by the pr­ime minister. The Ch­awla report called for a tra­nsparent market mec­ha­nism for allotting national resources, including spectrum, for commercial use.

The defence and telecom ministries had signed a pact in May 2009, agreeing to release 3G spectrum on timelines based on the rollout of an optical fibre cable network by the telecom ministry for the exclusive use of armed forces.

While 10 MHz was to be released on signing of the pact, another 5 MHz was set to be released on placement of supply orders, promulgation of a defence band and a defence interest zone.

Yet another 5 MHz was to be released on supply of equipment orders; the remaining 5 MHz was linked to installation of equipment. The entire 20 MHz was released in two equal tranches of 10 MHz in October 2009 and August 2010. This has already been assigned to the successful bidders of last year’s 3G spectrum auction.

A monitoring committee under cabinet secretary KM Chandrasekhar decided last August to divide the 1700-2000 MHz band into two equal bands of 150 MHz each for use by mobile telecom operators and the defence network. The note said that the department of telecom had expressed some reservations about these bands.

“The department is of the view that 150 MHz in the 1700-2000 MHz band for commercial use may not be sufficient to meet the requirement of 2G/3G services as decided by the monitoring committee,” the note said.

The department has suggested the release of an additional 80 MHz in the same band for use by telecom operators.

However, there seems to be little enthusiasm among mobile operators to bid for additional 3G spectrum. “It will make sense to participate in the bidding if there is more spectrum available and the spectrum is contiguous. Much will depend on how many biddable lots are there. The sense we get is that it may not be large enough to go to the market,” said a senior executive of a telecom company, who did not want to be identified in this report.