3G auction pushed to next fiscal year; GoM to continue proposal review

17 Feb 2009

The Indian government has confirmed that the much-delayed auction for 3G spectrum will not take place before the end of March this year, the Economic Times reports. The Group of Ministers (GoM) appointed to tackle the proposals for the auction process are expected to meet this week to work towards resolving issues including the number of licences to be made available, as well as the reserve price for the auction. The government has also announced that it has lowered its estimates for the revenue expected from the sale of the spectrum. It had previously indicated that it aimed to raise INR300 billion from the auction, but has now lowered this figure to INR200 billion.

Despite the latest setback, some progress is on the horizon however, with reports that the GoM has asked the defence forces to vacate 15MHz of spectrum; 10MHz will be set aside for 3G services, while the remaining 5MHz will be used for 2G services. The request comes after reports earlier this month that the Indian army was looking to delay its release of frequencies, claiming it would not do so until alternative networks were completed. It is understood that the GoM has now reached a decision on both the funding and time frame for building the new infrastructure. It will recommend funding of INR88.9 billion (USD1.82 billion) for the new networks, as well as earmarking INR5 billion for the completion of a fibre-optic network for the Air Force by Bharat Sanchar Nigam Ltd (BSNL), the latter of which is due to be completed by June 2009. The GoM will now seek approval for the funding from the Cabinet Committee on Economic Affairs. A Memorandum of Understanding (MoU) will be signed between the Department of Telecommunications (DoT) and the Ministry of Defence prior to the release of the spectrum, and whilst it has been hinted at that this could be completed as early as next week, no official deadline has been announced.