3G spectrum auction may happen next year

Last Updated: Monday, July 20, 2009 - 16:15

New Delhi: After raising the hopes of both subscribers as well as telecom companies, the government is understood to be in no special hurry for auctioning spectrum for 3G mobile services this calendar year.
Earlier, indications were that the radio waves would be auctioned by September this year.

According to sources close to the development, there is a feeling that the government may not get the revenue it is looking at if it bids out spectrum in the midst of a global recession - which means mobile users would have to wait a while before they can enjoy faster voice and data services.

The government has projected a revenue of Rs 35,000 crore in budget 2009-10 from the auction of spectrum and had last month decided to keep the reserve price at Rs 4,040 crore for radio waves for pan-India operations.

An Empowered Group of Ministers (EGoM) chaired by Finance Minister Pranab Mukherjee has been formed to look into issues relating to 3G spectrum auction and decide on the number of slots to be auctioned in the first phase.

Asked whether the Department of Telecom (DoT) has sought the first meeting of the EGoM, sources said the meeting is likely to take place soon but confirmed that auction of spectrum may happen only in January-February next year.

Going by the proposed reserve price of Rs 4,040 crore, the government is expecting to garner over Rs 32,300 crore -- assuming that all seven players, including BSNL/MTNL, opt for 3G mobile services across India.

Meanwhile, the government today said that 3G spectrum was available in all states except in Rajasthan (nil) and only five MHz in Himachal Pradesh.

Only four southern states and Orissa have maximum 60 MHz each of 3G spectrum while in other states the quantum of spectrum varies between 10 MHz to 50 MHz.

Last month, Finance Minister Pranab Mukherjee and Raja had met Prime Minister Manmohan Singh and decided to fix the reserve price at Rs 4,040 crore, double from what was initially recommended by the DoT.

Initially, six private operators apart from state owned MTNL and BSNL would be allowed to offer 3G services that enables high speed internet, videos and many other value-added services on mobile phone.

While the government would get at least Rs 24,240 crore from six operators that are chosen after the bids, PSUs MTNL and BSNL would shell out another Rs 8,080 crore assuming no player bids beyond the reserve price.

Bureau Report



First Published: Monday, July 20, 2009 - 16:15

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