Government resolves 3G auction issues; sale date still likely to miss end-March deadline

16 Feb 2010

The Indian government has reportedly resolved issues hindering the progression of the much-delayed auction of 3G spectrum, but it still appears unlikely that the sale process will be concluded before the end of the financial year. According to the Economic Times, India’s Finance Secretary, Ashok Chawla, confirmed the latest development, noting: ‘The issues relating to [the] 3G auction have been resolved, but I can’t say whether the actual auction will happen before 31 March.’ In addition, the minister said that should the auction be delayed until the 2010-11 fiscal year, then it is expected that India’s deficit for 2009-10 could widen to more than the currently projected 6.8% of GDP.

Meanwhile, the Cabinet Secretary, KM Chandrasekhar, has claimed that it does not matter whether the auction is held before the end of March, instead arguing that the date should be set with a view to maximising revenue from the spectrum sale.

According to TeleGeography’s GlobalComms Database, after a number of initial false starts, India’s W-CDMA auction was expected to be conducted on 7 December 2009, with bids invited between 26 October and 13 November, while auctions for CDMA 1xEVDO and WiMAX licences were to be held two days later. However, the auction was subsequently postponed until 14 January 2010 over pricing and payment schedule issues, and then pushed back further to 12 February. More recently, in February 2010 the Ministry of Law and Justice suggested that the government could expose itself to potential financial penalties if it auctions spectrum that it does not currently possess, prompting a further hold up in the sale process.