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DoT moves SC against any stay on the spectrum auction

The department of telecommunications (DoT) is understood to have moved Supreme Court against any stay on the upcoming auction of spectrum slated to start from March 4.

The case is expected to come up for hearing on Monday, according to sources in the DoT.

The government is expecting to earn about Rs 1 lakh crore from the sale of spectrum – 800, 900, 1800 and 2100 MHz — in March this year and this is the first biggest auction of spectrum under the new government.

According to reports, Bharti Airtel, Idea Cellular and Reliance Telecom have separately moved courts against certain conditions mentioned in the NIA (notice inviting application), which is a legal framework for spectrum auction. While, Idea Cellular has filed a petition in the Allahabad High Court against tougher rules in the auction.

All the cases are expected to come up for hearing next week.

Telcos have gone to Court against DoT’s non-satisfactory responses on various issues including spectrum caps. Telcos had asked DoT to correct the anomaly in the overall spectrum cap by fixing the cap on the basis of the spectrum available with the DoT for allocation of commercial use, even if it is not being put in the auction. According to the telcos, in no case can the spectrum caps be lower than the ones prescribed in a prior auction

Sistema Shyam Teleservices, which provides services under MTS brand, has also moved telecom tribunal TDSAT asking it to direct DoT to make its spectrum holdings in the 800 Mhz band contiguous or continuous.

Recently, Bharti Airtel and Reliance Telecom won a ruling in the Tripura High Court allowing them to bid for the entire amount of spectrum currently in their use – 4.4 Mhz each – in the Northeast circle and not a minimum of 5 Mhz as mentioned in the NIA.

Telecom operators have also expressed concern on the high earnest money deposit (EMD) requirements for the auction. The average EMD as a percentage of the reserve price for the February 2014 auction of 1800 MHz was 22 per cent. For the 2015 auction, EMD has been set at 33 per cent on a pan-India basis.

The sharp increase in the EMD requirement in the current auction is surprising because the General Financial Rules (GFR- Rule 157) of the Government of India clearly specify that the amount of bid security should range between two per cent and five per cent of the estimated value, the telcos said in their submissions to DoT.

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