Telcos that miss out on the first round of 3G spectrum auctions will have to pay a much higher price for these radio frequencies when they are auctioned at a later stage.

The Department of Telecom (DoT) has decided to hold a second round of auctions as soon as the defence vacates more spectrums, but the highest bid in the first round will become the reserve price for the second round.

For instance, cities like Mumbai and Delhi will be able to accommodate only one or two operators in the first round of auctions, set to take place by the year end. Currently, the base price for 3G spectrum in these metros is Rs 160 crore. But, when the second round of auction happens, it would start from the price paid by the highest bidder for each Delhi and Mumbai.

Communications and IT minister A Raja had said the government would try to accommodate up to five players in the first round, adding that this could be extended to 10 at a later date. Successful bidders are expected to launch services by mid 2009.

The second round of auctions could be held as early as mid 2009. Government sources said that the DoT is talks with the defence forces to release about 15 MHz of 3G radio frequencies in the spectrum-starved circles so that an additional three operators can be accommodated.

The circles where the second round of auctions will most likely be held include Bihar , Maharashtra, Punjab, West Bengal, Delhi , Gujarat, Himachal Pradesh, UP (West), the North Eastern states and Rajasthan.

At present, there are only eight circles where sufficient 3G spectrum has been identified to accommodate 10 players. The circles are: Andhra Pradesh, Chennai & Tamil Nadu, Haryana, Karnataka, Kerala, Kolkata, Madhya Pradesh and Orissa.

Source:infotech