3G auction may be deferred only by a few days

The proposed auction of 3G (third generation) telecom spectrum is on track and will be held this financial year, a top source in the government told DNA Money on Wednesday.

Notwithstanding the uncertainties surrounding availability of spectrum with the department of telecommunications (DoT) and the defence ministry’s unwillingness to vacate spectrum, the auction may be deferred by a few days, but not for very long, the source said.

The much-delayed 3G auction process is scheduled to begin on January 14, 2010.
Sam Pitroda, the advisor to the Prime Minister on public information infrastructure and innovations, finance minister Pranab Mukherjee, defence minister A K Antony and communications minister A Raja are likely to meet on Thursday to discuss the issue of spectrum vacation and to take stock of the 3G auction process.

Recently, two meetings between these ministers had to be cancelled due to several reasons. At a pre-bid conference earlier this week, a DoT official had said the government was committed to holding the auction this financial year. The status of 3G spectrum availability and slots for auction would be clear by December 7, he had said.

The meeting of the three ministers and Pitroda is expected to bring clarity on spectrum.
New foreign players stayed away from the 3G pre-bid conference on Monday, triggering speculation there’s lack of interest in the proposed auction. But, a source pointed out that representatives of the foreign telcos were present at the pre-bid conference.

The pan-India reserve price for 3G spectrum has been fixed at Rs 3,500 crore and that for broadband wireless access (BWA) at Rs 1,750 crore. The government expects to garner around Rs 35,000 crore from the auction process, which would help it bridge the steep fiscal deficit.

Last year, the government had to defer the 3G auction ahead of the general elections. A major reason then was the “arbitrary” allocation of slots across circles. The committee of secretaries, set up to monitor the issue of vacation of spectrum by defence forces and reallocation of that spectrum to telcos, referred the matter to Pitroda recently.

3G systems represent the next step in the evolution of mobile cellular communication. 2G systems focus on voice communication, while 3G systems support increased data communication.