Radio frequency auction for 3G telecom services likely to be deferred

January 15th, 2009 - 3:10 pm ICT by IANS  

New Delhi, Jan 15 (IANS) The much-awaited radio frequency auction for third generation (3G) telecom services is likely to be delayed further and a new timeframe will be notified after the cabinet takes a decision, a government official said Thursday. The auctions of 3G and broadband wireless access (BWA) spectrum were scheduled to start Jan 30, but an official of the Department of Telecom (DoT) said the schedule has been revised.

“Inter-departmental discussions are still on,” the DoT official said on condition of anonymity.

“The new date will be decided after the CCEA (Cabinet Committee on Economic Affairs) takes a decision on the whole issue,” he said.

The telecom ministry also proposed last week that eight players be awarded licences for 3G spectrum, rather than five, in each of India’s 22 telecom circles.

The move is aimed at increasing the revenue generated from the auction, after DoT rejected the finance ministry’s demand that it double the base price for a nationwide 3G licence.

DoT has also decided not to levy administrative charge, equivalent to two percent of licence fee annually, on successful bidders for 3G services. The administrative charge had been recommended by the Telecom Regulatory Authority of India.

The government expects to raise Rs.30,000-40,000 crore (Rs.300-400 billion or $6-8 billion) from the 3G and BWA spectrum auctions. This amount could reduce the government’s budgeted revenue deficit by at least 40 percent.

The telecom ministry is under pressure to raise more revenue ever since it witnessed a poor response to the pre-bid conference last month. Participation from foreign players was minimal at the conference, sending out signals to the ministry that there might be little or no participation by them in the upcoming 3G auction.

Another DoT source had earlier said that though the government is ready to carry out the auctions according to the prescribed timeframe, it was the industry that wanted it to be deferred on account of the financial slowdown.

A 3G telecom service provides data access at speeds faster than those supported by mobile phone service technologies currently used in the country, such as CDMA (code division multiple access) and GSM (global system for mobile communications).

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