Spectrum-scarce India presses on with 3G auction

Dylan Bushell-Embling
26 Oct 2009
Daily News

The Department of Telecom (DoT) has set a revised schedule for India’s long-awaited 3G auction, even though its dispute with the defense department over spectrum appears to be unresolved.

In an information memorandum, the DoT announced the auction would start on January 14, 2010.

It was originally set for December 7, but was delayed because the defense ministry had not yet vacated key 3G frequencies.

Communications Minister A. Raja last week warned that the auction could well be delayed well into next year if the spectrum dispute were not settled.

The government had planned to issue a total of five licenses for each of India's 22 telecom circles, of which one will be reserved for either state-owned operators BSNL or MTNL.

But with the defense department still occupying 3G spectrum bands, just two licenses will be auctioned off in key telecom circles such as Delhi and Gujarat, DoT said.

Where it has 20 MHz available in the 2.1GHz band, it will sell four blocks of 2 x 5MHz spectrum in addition to the bands reserved for MTNL or BSNL. Where less is available, the spectrum will be “allocated” in blocks of 2 x 5MHz, DoT said.

The department confirmed that the reserve price for a pan-India 3G license has been set at 35 billion rupees ($751.2 million).

The base price for individual circles has been set at 3.2 billion rupees for each of the seven category A circles, 1.2 billion rupees for the eight category B circles, and 300 million rupees for the category C circles.

Foreign firms will be entitled to bid for 3G licenses through an Indian subsidiary, but only if that subsidiary is at least 26% domestically owned. Such companies will also need to acquire a telecom license, and receive the approval of the Foreign Investment Promotion Board (FIPB).

The department also confirmed that the Wimax auction will take place two days after the close of 3G bidding.

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