The UPA government may be able to raise only a quarter of the projected revenue from auction of 3G (third generation) telecom spectrum this financial year, if a note prepared by the Department of Telecommunications (DoT) is anything to go by.
Sources said telecom and IT minister A Raja has conveyed this point to finance minister Pranab Mukherjee, too. The proposal has been referred to the ministry of law as well for vetting the legal implications.
Faced with a steep fiscal deficit, the Centre is keen on holding the auction process this financial year. The government is targeting Rs30,000-35,000 crore from the auction.
The Union Budget presented earlier this year had kept a provision of raising Rs25,000 crore from 3G auction this fiscal.
Some telecom operators are opposed to 3G auction this fiscal due to the heavy investment involved in the bidding process. It is believed that a section in the industry has made a representation to DoT seeking payment in phases, in sync with spectrum allocation.
While a block of the 3G spectrum would be vacated in July 2010, some more will be released in September 2010.
As the defence ministry would vacate 3G spectrum to be allocated to telcos in phases, a DoT proposal talks of taking only the bid deposit this financial year. The remaining amount can be paid by the winning telecom operators at the time of “actual assignment of spectrum,” it says. Bid deposit is 25% of the actual bid amount, the note states.
The DoT note points out that the notice inviting applications (NIA), which was scheduled for December 8, would get delayed by about 2-3 weeks. “However, the auction would be completed and money due received in financial year 2009-10 itself,” it adds.
Meanwhile, DoT officially announced on Tuesday that the government is in the process of finalising the details to be included in the NIA which are being fine-tuned. “The NIA will therefore be issued shortly,” it said.
Recently, Prime Minister Manmohan Singh had said, “I am happy that the auction of spectrum for 3G and broadband wireless access services will be conducted shortly.” The PM did not give any timeline. The PM’s statement came a day after the Union Cabinet cleared the Rs10,000 crore optic fibre project for defence forces, in lieu of the spectrum that it vacates for the telcos. The Cabinet nod would enable the defence ministry to vacate a total of 45 MHz of spectrum (including 2G and 3G), that can be further allocated to telecom companies.
Comments