Drama: Spectrum auctions in India

The Indian government has had a rocky ride with spectrum policy – or sometimes the lack of it – since economic reforms began in 1991. The country's first four cellular licenses were awarded from 1991 onwards via a simple, closed-bid, auction process with winners getting a limited initial spectrum assignment in the 900MHz band. Confusion was quickly added to the process with the introduction of fixed WLL licenses with limited mobility for a modest standard entry fee.
Then mobile WLL licenses for CDMA, using 850MHz spectrum, were administratively awarded to Reliance Communications in 2002 and Tata Teleservices two years later, much to the annoyance of the cellular operators. They became even more annoyed when the CDMA operators were allowed to also start offering GSM services in 2007.
The sense of crisis deepened, when in 2008 then Telecoms Minister Andimuthu Raja administratively awarded a new set of licences at prices set in 2001 on a first-come, first-served basis. That had dramatic consequences after a while. However, nothing was done in 2008 and the new licensees – mostly JVs between local firms and foreign partners – began rolling out new GSM networks at 1800MHz with only Russia's Sistema having opted for an 850 MHz CDMA licence.
The next act came with the much-delayed 3G auction of 2.1GHz spectrum in 2010. This was sold on a regional basis, with just three or four 2 x 5MHz lots available—one per operator—in each of the 22 telecoms regions (circles). Such was the pent-up demand for spectrum, bidding was fierce and eventually near-world-record prices were achieved. The “success” of this auction—from the viewpoint of government coffers rather than the impact on operators' fraught finances—led to a rethink of the 2008 process.
Following an investigation, the Supreme Court in 2012 ordered all 122 regional licenses awarded be withdrawn and be put up for auction. The government began seeing dollar signs and set ridiculously high reserve prices on the spectrum, resulting in failed auctions in 2012 and 2013. Operators stayed away from these in droves.
Raja was charged with corruption and spent 15 months in jail before receiving bail, and he and 16 other officials and business executives are now awaiting trial.
Finally, in February 2014, the 1800 MHz spectrum was sold alongside key 900 MHz licences coming up for renewal, thanks largely to a big drop in the reserve price. Once this had persuaded operators to participate, fierce bidding took place, and government coffers again swelled. As well as low reserve prices, several other factors contributed, perhaps most important being the liberalisation of the spectrum for technology-neutral licenses.
But the dollar signs are coming back as the government prepares to try and re-auction the (now, also liberalised) 850 MHz spectrum which was unsold at the earlier auctions. Additional spectrum in 2.1 GHz is also being considered for sale soon.
The drama continues.