the Cellular Operators’ Association of India (CoAI) in their representation to Finance Minister dated May 08, 2008.
Issues relating to 3G/WiMax Spectrum
6.Allotment of 3G spectrum may be made on the basis of anInternational Competitive Bidding (ICB) process, with reiteration of the existing mandatory “roll out” clause and preconditions relatingto prior experience in the sector, net worth criteria etc beingspecified for pre-qualification of bidders.7.Both TRAI and CoAI (representation dated May 26, 2008)have argued in favour of auction among UAS (including ISPlicenses, for WiMax) license holders. The main arguments insupport of this recommendation are as follows:(i)The new entity bidding for 3G spectrum will need a UASLicense. There is a “queue” for this license and the practiceis to allot the license on a “first come first serve” basis. If thenew entrants are allocated spectrum through auction andthen granted the license subsequently, it would amount toeffecting a “backdoor” entry into UASL. On the other hand, if the entity is not granted a UAS License, it would amount tocreating a new class of licenses, which would needreference to TRAI.(ii)The existing licensees, who have huge investments ininfrastructure and systems, will be in a better position to rollout 3G services faster and at lower incremental cost.Presence of 13-14 UAS Licenses per circle will ensureenough competition to have a meaningful price discovery.8.These arguments are not found to be tenable on account of following reasons:(i)Spectrum allocation for 3G services should be treated
and not an extension of the 2G allocation process. Itis for this reason alone that with respect to allocation of 3Gspectrum, a spectrum acquisition price and a different