New Delhi: The electronic
auction, a method to be used later this year to farm out
rights to use spectrum, or airwaves, for third generation
(3G) mobile phone services, has only been previously used in
India to bid for spices, tea or coal.
But that does not deter
Siddhartha Behura, the top bureaucrat here in charge of
spectrum sale, one bit. “E-auction brings in greater
transparency, less cartelization, and ‘on-the-spot’
bidding will force the competitors to match the highest
price,” said Behura, secretary in the government’s
department of telecommunications, or DoT.
An e-auction, he said,
would take a few hours instead of the several months if
“the bidding is circle-wise” in paper. DoT commonly
calls telecom licensed areas “circles”. On Friday, DoT
announced its e-auction plans as part of a larger set of
guidelines for 3G services, which enable high data speeds
and promise fast video and audio downloads. The
much-anticipated auction, minister of state for
communications Jyotiraditya Scindia said then, is expected
to bring the government Rs30,000-40,000 crore.
committee, with members from the Telecom Commission (DoT’s
apex body) and the finance and information technology
ministries, will first set rules on who can bid, request
interest in the bidding, and shortlist eligible firms in a
technical evaluation. Then, the e-auction will be held, said
Recent e-auctions for
telecom spectrum in the US, the UK and Germany have been
mostly successful. In those cases, Mahesh Uppal, director of
Com First Consulting Pvt. Ltd in New Delhi, noted only
“occasional defaults by telecom firms. But (such
instances) happened during the dot-com bubble; it was held
at a time when the markets were ill-understood.” He
predicted the chance of “extreme bids” and licence
commitment defaults at near-zero.
An industry expert said
e-auctions offer better transparency, price realization on
tangible and intangible resources and time-bound accuracy.
“A ‘virtual auction room’ is created and bidders are
allowed to enter using a user name and password, and can
place bids from any geographical location,” said Jaganni
Vasan, managing director of e-auction firm MatexNet Pvt.
Ltd. “The seller and bidders will be able to see the price
movements, but will not know which firm or individual have
placed the bid till the process is completed and a final
report is generated and sent to the seller.”
New Delhi’s exposure to
e-auctions in the past includes Coal India Ltd’s June
announcement to sell some 15 million tonnes of coal through
one such auction. The Spices Board of India has been
following e-auctions since 2004 and the Tea Board has been
doing so for the past one year.