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DoT may de-link auctioneer fee from reserve price

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The Department of Telecom may de-link the fee to be paid to the auctioneer of 2G spectrum from the final bid price. An inter-ministerial committee has recommended that the auctioneer’s fee should be separately fixed instead of linking it to the final bid price.

According to the Request for Proposal floated by the DoT, the auctioneer will get a small percentage of the difference between the base price and the final bid price.

The DoT has also fixed a minimum fee of Rs 10 lakh in case the auction fails or the bidding does not go beyond the base price. Some of the auctioning firms fear that as the proposed reserve price is already high, the expected final bid price may not be significantly higher, unlike the 3G auctions held in 2010. Therefore, the DoT is now considering to fix a flat fee for the auctioneer.

Meanwhile, the Empowered Group of Minister (EGoM) is scheduled to meet on Thursday to decide on spectrum pricing. The Group has to decide on one-time fee to be charged from incumbent players. The DoT has given various options including charging all operators for the entire spectrum they held for the balance period of the 20-year licence.
The EGoM also has to take a decision on the reserve price for the upcoming auction for spectrum in the 1800 Mhz and the 800 Mhz band. While the DoT has already issued guidelines for the auction, the crucial decision on the base price is yet to be taken. The TRAI has suggested Rs 18,000 crore for 5 Mhz spectrum but the operators want this to be reduced by at least 80 per cent. The TRAI Chairman, Mr Rahul Khullar, has been asked to make a presentation at the meeting on Thursday.

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