And this time, we mean it; 3G base price, number of licences finally set

28 Aug 2009

The long-running saga related to the base price for the auction of 3G spectrum in India looks to have finally come to an end, with the group of ministers (GoM) tasked with resolving the matter announcing its final recommendations. The Economic Times reports that the GoM, which was headed by finance minister Pranab Mukherjee, has fixed the starting price for a 3G licence at INR35 billion (USD714 million). This cost is around INR500 million less than the base price that telecoms minister Andimuthu Raja and the finance ministry had agreed in June 2009, but is almost INR1.5 billion higher than the level recommended by the Telecoms Regulatory Authority of India (TRAI). In addition to finalising the pricing structure for the auction process, the GoM also announced that a total of five operators would be licensed to offer 3G services in each circle; of those five slots one is already reserved for state-owned operators Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Nigam Telephone Ltd (MTNL) in those circles in which they operate.

In addition to finalising plans for 3G licensing, the GoM also announced the starting price for WiMAX spectrum at INR1.75 billion. The government expects to complete the auctions for both 3G and WiMAX within 90 days, and has said it anticipates that it will raise around INR25 billion from the process.