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3G, WiMAX auctions to be delayed
By siliconindia
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Friday, 02 January 2009, 19:41 IST |
3 Comments
New Delhi: The finance ministry has asked the telecom department to double the floor price for 3G and wireless broadband spectrum that is being viewed as a move that could further delay auctions, according to executives in two leading telecom companies. Bids start at Rs 4,040 crore and Rs 2,020 crore for a pan-India 3G-spectrum and WiMAX spectrum respectively. The government would rake in at least Rs 28,280 crore from the auctions. In a letter to the telecom department, the finance ministry has asked it to submit a fresh proposal to Cabinet after making this change.
"Not a single stand-alone internet service provider (ISP) will be able to bid for WiMAX spectrum if the base price is doubled. Even at the current price of Rs 1,010 crore, ISPs have decided to stay away," said Rajesh Charria, President, industry body ISP Association.
The communications ministry plans to allow a maximum of five players per circle for 3G services, while for WiMAX, it has proposed only four operators in a zone. The primary reason behind the finance ministrys move was the poor response to the recent 3G pre-bid conference by new firms, including foreign players, who feel that the auction guidelines have been structured to favor only existing Indian operators. The absence of foreign players, who were expected to bid aggressively, could result in the government falling short of its target of getting Rs 40,000 crore.
The government has already doubled the base price once for 3G and WiMAX radio frequencies. Telecom regulator Trai had initially recommended that the base price for 3G spectrums (pan-India) be fixed at about Rs 1,100 crore and that for BWA technologies be about Rs 500 crore, which the communications ministry, in its 3G policy in August 2008, had doubled the reserve price to Rs 2,020 crore and Rs 1,010 crore for 3G and WiMAX spectrum respectively.