3G auctions in further turmoil

9 Dec 2009

In line with earlier reports, it has been confirmed that India’s 3G auction process has once again fallen behind schedule, the Economic Times reports. As reported in CommsUpdate on 8 December, rumours had suggested that release of the notice inviting applications (NIA) would be delayed, and the Department of Telecommunications (DoT) has now confirmed that this is indeed the case. ‘With reference to the revised information memorandum issued on 23 October 2009, [the] government is in the process of finalising the details to be included in the Notice Inviting Applications (NIA) which is being fine tuned. The NIA will therefore be issued shortly,’ the DoT said with regard to the matter.

Alongside the fresh delay, further complication may yet be on the horizon, with reports that winning bidders in the 3G auction process may only have to pay 25% of the bid amount initially, with the remainder then payable in the following financial year on receipt of spectrum. The alteration to the payment schedule is understood to stem once again from concerns over the level of third-generation spectrum that will actually be available to distribute to the auction winners. There are existing concerns that just one telco may be awarded 3G frequencies directly after the auction, with others forced to wait until as long as September 2010. In addition, continued worries over the level of spectrum available may yet see the government reduce the number of licences on offer, with an internal note from the DoT suggesting that the auction may be limited to three players. By contrast, under the existing proposals the government is set to auction four slots of 3G spectrum to private operators in all circles, with full payments due within 15 days of the auction’s end.