DoT readies for 3G auction

Department of Telecom gearing up for the 3G spectrum auction as per schedule on January 30 and has left it to the Cabinet Committee on Economic Affairs to take a call on the reserve price for a pan-India 3G licence.

The Finance Ministry has recommended doubling of the reserve price for pan-India 3G spectrum to Rs 4,040 crore.

Sources said DoT had floated a note for CCEA on December 19. It had already incorporated the suggestion of the Finance Ministry to double the reserve price to Rs 4,040 crore for CCEA's consideration.

Now it is for CCEA to take the call on the various suggestions given by different ministries, which has been put in DoT's cabinet note.

Sources said many ministries have given their suggestion in favour of the existing bid price and other details.

Asked if DoT is expecting a delay in the already revised time schedule for 3G, the source said, "Till the time CCEA does not decide otherwise, we will have to be ready for the January 30, 2009 date of auction. At the moment, our focus is on January 30."

The suggestion of the Finance Ministry, industry bodies said, if accepted could further delay bids due to start on January 30 that has already been deferred by two weeks.

If the MoF proposal is accepted, bids for a pan-India WiMAX licence would be at Rs 2,020 crore. An industry official said a higher bid price would further reduce interest in 3G auctions, which are already getting a poor response from foreign players.

Potential WIMAX bidders are equally unhappy with the proposal. Besides, the delays will also take their toll on the auction process.

The auctions were initially scheduled for January 16, but got postponed to January 30, as the Cabinet has yet not approved some key parameters.

While the Communications Ministry can turn down the Finance Ministry's proposal, the exchange of letters between the two will itself result in a delay, according to an official.