The Department of Telecom (DoT) is evaluation several pricing methods for the fixed priced allotment of spectrum after two rounds of spectrum auction failed to attract much interest in the telecom sector.

A note form the DoT said that an extended committee will evaluate the concept, operational parameters and conditions for adopting a market related process for allocating spectrum to telecom service providers in the country. The administrative allotment of spectrum involves models that are different from an outright sale via a bidding process.

“The methodology of spectrum allotment and pricing, other than through auction, for users such as government, public sector units, holders of CMRTS, PMRTS, VSAT, internet service providers, national long distance, international long distance, teleport of TV uplinking licences as well as for other private captive users is under consideration by an expanded committee in DoT,” the department said.

It is believed that the Comptroller and Auditor General has said that the formation of cartels by telecom service providers in the country is the reason behind the failure of spectrum auctions in the country as the firms collectively decided to shun the auctions. The telecom firms did not respond well to the auction in 2012 for the spectrum that was freed up by the cancellation of 122 telecom licenses by the Supreme Court of India in a landmark judgement. The auction managed to raise only about Rs. 9,407 crore out of Rs. 28,000 crore expected for the government.

The CAG hinted that the major telecom firms including Airtel, Vodafone, RCom, Idea and Tata Teleservices might be involved in cartelisation in the industry. CAG has reportedly communicated to the Telecom Ministry that leading telecom service providers formed cartel and declined to take part in the auction in 2012-2013. The CAG is now seeking remarks form the ministry in a draft report.