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New policy announcement soon

New Delhi May 23 The Department of Telecom is looking at the option of conducting e-auction for allocating spectrum for third generation mobile services.

If the Government goes ahead with the proposal, this will be the first time when operators will be asked to bid online.

Online bidding

Similar processes have, however, been followed in the private sector during acquisitions.

For example, bids for Hutchison telecom International's stake in Essar Hutchison were invited online.

When contacted, senior DoT officials said that this was part of the proposals being discussed but it was not final.

They said that the final 3G policy will be announced shortly.

DoT sources said that online biding would allow the process to be real time, quick and transparent.

Other Proposals

Some of the other proposals being discussed include giving spectrum to State owned telecom firms BSNL and MTNL without having to bid. BSNL and MTNL may, however, have to match the price quoted by the private operators. The private telecom operators have opposed this proposal on ground that it would disturb the level playing field.

Earlier, the Ministry of Communication had hinted that foreign telecom operators would be allowed to bid for the spectrum. Existing private operators have said that they have the first right to spectrum before the Government permits new players into the sector.

Even as the DoT is putting in place its policy for 3G services, one of the primary concerns would be availability of spectrum. Defence forces, which is biggest user of radio frequency, has expressed reservation against vacating radio frequency in favour of commercial mobile service providers. The Defence forces have said that they would not vacate the spectrum unless an alternate communication network such as the optical fibre cable project being set up by BSNL is complete.

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