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Finmin wants price for 3G spectrum doubled

Auction of spectrum for third generation (3G) telecom services may be delayed further, this time indefinitely.

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NEW DLEHI: Auction of spectrum for third generation (3G) telecom services may be delayed further, this time indefinitely, with the finance ministry seeking a doubling of the reserve price for bidding.

It is believed that Prime Minister Manmohan Singh, who now holds the additional charge of finance ministry, has signed on a note saying the reserve price for pan-India 3G spectrum should be increased to Rs 4,040 crore, up from the current Rs 2,020 crore.

The finance ministry note has also mentioned that the reserve price for broadband wireless access must be doubled from the current Rs 1,000 crore for pan-India allocation.

Though the department of telecommunication (DoT) has deferred the auction date of 3G from January 16 to January 30, the latest salvo from the finance ministry means it has to seek the approval of the Telecom Regulatory Authority of India (Trai) all over again.

Finmin wants price for 3G spectrum doubled The department would also have to modify the note to be sent to the Cabinet Committee on Economic Affairs.
Both imply an indefinite delay in holding the auction.

Also, telecom companies are not expected to be enthused to bid for 3G and BWA when the reserve price is doubled. Foreign telcos have already indicated that they may not be in a position to bid for 3G in the midst of an economic slowdown and even domestic companies are unlikely to find the increase in the reserve price unacceptable.

Sources said the finance ministry may have brought up the doubling of the reserve price issue to stall holding of 3G auctions so close to the general elections. It is learnt that the PMO and the Cabinet Secretariat are not in favour of holding the auctions in a hurry, to keep away from controversies.

Another view in the industry, however, is that the finance ministry has asked DoT to double the reserve price as it is eyeing greater revenues from domestic players since foreign telcos have already backed out.


 

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