Indian 3G auction could delayed till mid-2010, warns Raja

Ruth David
22 Oct 2009

India’s long-expected 3G auction could be delayed well into 2010 because of a lack of spectrum, Telecom Minister A. Raja has warned.

The Defense Ministry is still occupying key 3G frequencies and is in dispute with the Department of Telecom (DoT) over which spectrum will be released for 3G.

The auction was originally set for December 7, but Raja said in a letter to Finance Minister Pranab Mukherjee that the government would not see revenues from the sale this financial year if the issue “is not resolved quickly.”

Raja called on the Finance Minister to intervene in the dispute, but a ministry official said the ball was in Raja’s court.

The 3G auction was expected to attract Rs 350 billion ($7.6 billion) into government coffers this fiscal year, which ends on March 31.

The Defense Ministry says it needs the frequencies because of a lack of bandwidth, although a fiber cable rollout by state-owned BSNL, funded by the telecom ministry, is underway. An official said on Wednesday that the Telecom Ministry had not met certain conditions pre-requisite to releasing the spectrum.

The two ministries are also in dispute over which frequencies should be released, with the defense ministry saying the bands the telecom ministry wants are in use by the armed forces.

The telecom ministry reportedly asked for frequency bands between 1920 MHz and 1980 MHz for the auction, but the Defense Ministry wanted to release spectrum between 1950 MHz and 1970 MHz.

While both ministries play the blame game, potential bidders still haven’t gotten an information memorandum listing eligibility conditions of the auction and details of the spectrum available. Originally, the telecom ministry had said it would release that information on September 29.

But as one controversy after another delays the process, potential bidders, especially foreign companies, are likely to lose interest, Raja warned in his appeal to the finance minister.

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