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Govt. brings down 3G slots to 3

By SiliconIndia | Thursday, 10 December 2009, 18:20 Hrs | 3 Comments

Bangalore: In a surprise statement, the government has said the 3G telephony spectrum available with it for sale currently could accommodate only three operators. A fourth slot has already been awarded to state-owned MTNL (that operates in Delhi and Mumbai and BSNL (rest of India). This move can deprive government of

5,000 crore (

55 billion) in revenue, according to Rediff.com.

The decision comes in the wake of the Ministry of Defence's reluctance to vacate the designated spectrum (air waves) for commercial use, official sources said, adding that the required notification would be issued soon. Government had earlier planned to auction spectrum to four private bidders, in addition to the state-run firms.

The government has fixed the reserve price of spectrum at

3,500 crore (

35 billion) for pan-India 3G spectrum and

1,750 crore (

17.50 billion) for Wimax (wireless Internet/broadband) and the auction is scheduled to begin from January 14 next year.

The government had projected a revenue of

25,000 crore (

250 billion) from the sale of spectrum, but this could now fall short of estimates as it would have to forgo at least

5,250 crore (

52.50 billion) due to cancellation of one slot.

Asked if the decision would require empowered Group of Ministers' nod in view of the change, officials said it has been discussed by the members and would be formally notified. On the issue of the Ministry of Defence refusing to vacate the spectrum, the officials said as per their memorandum of understanding with the Department of Telecom, 10 MHz of spectrum was vacated immediately and another 10 MHz would be given by June, 2010.

In case of Wimax, it could not be ascertained whether or not the same number of slots (four) would be auctioned as the required spectrum for wireless broadband was available.
The loss in revenue could be more due to aggressive bids. Bidders are expected to offer more than the reserve price.

The DoT officials also said that notice inviting bidders would be issued soon as part of revised information memorandum released last month.

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Reader's comments(3)

1: With 4G on the horizon, I do not see the point of operators paying huge license fees for Second-Hand imported Technology (Dumped by the West as they migrate to 4G). Why not auction 4G instead? It will put India ahead in the technology map and consumers will get value for money, rather than pay through their nose for obsolete 3G. THis is the reality, we have missed the 3G bus and its time to catch the next (4G) one.

Posted by:SPG - 10 Dec, 2009

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2: Bribe them u can get one. Remember Work is God.

Posted by:Telecom guru - 10 Dec, 2009

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3: This is not a good news. First govt keeps on delaying the auction and then now only 3 operators can have it. I hope at least Airtel and Vodafone are amongst the three.

Posted by:Satish - 10 Dec, 2009

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