Anurag Bhullar

To resolve the ‘auctioning roadblock’ relating to the third generation or 3G phones, Department of Telecommunications (DoT) has offered invoking of its rights so that it can cancel those bids which are higher than the reserve price but do not meet the Government’s expected revenue amount.

The value of expected revenue is to be fixed in consultation with the Finance ministry, for each block of the spectrum (5MhZ) and on all-India basis. Presently, all-India licenses (four in number) are being offered by the government to new bidders and operators. MTNL and BSNL have been issued in Mumbai and Delhi. The Finance ministry recently asked DoT to revise the terms of policy and double the reserve price from existing value of Rs.2020 crore to Rs. 4040 crore. This suggestion is primarily thought to have come out of the government’s concern of losing revenue target and selling the spectrum, below actual price.

However, DoT theorised that this move will only make the services expensive and government might end up with unsold licenses. Instead, a middle route is to make use of the clause 11 of the Information Memorandum, which states ““Government reserves the right to cancel the bidding process or disqualify any bidder without assigning reasons.”