3G auction base price to be announced in a week (Lead)

June 19th, 2009 - 7:41 pm ICT by IANS  

Manmohan Singh New Delhi, June 19 (IANS) The government will announce the base price for the much-awaited auctions of third generation (3G) radio waves within a week, Communications and IT Minister A. Raja said here Friday.
“We are hopeful of a decision within a week,” Raja told reporters after meeting Prime Minister Manmohan Singh along with the Finance Minster Pranab Mukherjee to reach a consensus on the base price for the auction of the scarce resource.

The finance ministry in March proposed doubling the base price from the Rs.2,020 crore that had been decided upon last year. The Department of Telecom (DoT), however, has suggested that it be kept at Rs.3,540 crore.

“It is a proposal by the finance minister. We have discussed the matter with the Prime Minister,” Raja said.

“The matter will be referred to the GOM (group of ministers) or the CCEA (Cabinet Committee on Economic Affairs),” he added.

Earlier this week, the communications minister said the base price could be differentiated according to service areas “depending on the viability”.

The government, reeling under a burgeoning fiscal deficit pegged at Rs.332,835 crore or 5.5 percent of the GDP, hopes to get some relief from the funds generated through these auctions.

“If you calculate using just the base price at Rs.4,040 crore, the government will earn about Rs.24,240 crore,” said a senior official in the telecom ministry.

“There will be an announcement on these lines in the upcoming union budget also,” the official said.

“Six 3G licenses will be auctioned in the first phase,” he added. The DoT plans to auction radio frequencies for 20 of 22 telecom service areas in the country.

The auction of 3G radio spectrum, which would allow telecom operators to offer high-speed Internet and video calls on mobile phones, has been delayed several times.

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