Govt may generate 45K Crore through 3G broadband sale

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New Delhi: Telecom Minister A Raja believes that the sale of third generation broadband spectrum will help Indian Government to get upwards of 45,000 crore. The governments target was 30,000-35,000 crore, but it is likely to exceed by a large margin.

Talking to Economic Times, Minister said, "The gravity of the sale process is reflected in the number of participants. The auctions begin today." He also said that telecom department's estimates indicate the country will rake in over 45,000 crore from the sale of airwaves.

The government has fixed the base price of 3,500 crore for pan-India 3G airwaves and 1,750 crore for broadband wireless spectrum bids. The government is auctioning three slots of 3G airwaves in 17 telecom service areas and four in the other five, and only two slots are up for sale across the country for broadband airwaves. State-owned BSNL and MTNL already offer services on 3G and broadband wireless frequencies, but these telcos will have to match the highest bid in the sale process.

The government feels that there is likely to be aggressive bidding. Vodafone Essar has raised a five-year, 10,000-crore loan from SBI, Punjab National Bank, Canara Bank and Bank of Baroda to finance its 3G bid. Even Bharti Airtel will use reserves of 8,000 crore to fund its 3G bid. Idea Cellular has collected nearly 9,500 crore for the bids. Also, Aircel would raise about $900 million via short-term debt. The company is expected to use this to part-fund its 3G and BWA bids. Reliance Communications and Tata Teleservices are also slated to place competitive bids for all circles to enhance their data offerings.

Most of the telecoms are requesting Telecom Regulatory Authority of India (Trai) to clear the air on whether the 3G airwaves auction will indeed be the benchmark for future allocations of 2G airwaves as suggested by an inter-ministerial committee last year.

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