The timeline for auction of third generation, or 3G, telecom spectrum has finally been announced, pushing the bidding date to the next financial year.

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This is being seen as a face-saving move by the UPA government.

Finance minister Pranab Mukherjee’s Budget of July 2009 had kept a provision of Rs 35,000 crore from the auction of 3G and Wimax spectrum in 2009-10.

Although the auction could not be held during this financial year, the UPA government wanted the process to start ahead of the Union Budget, scheduled for February 26.

The government issued the notice inviting applications (NIA) through its Press Information Bureau (PIB), but the Department of Telecommunications (DoT), which has been actively putting up the 3G agenda on its site till recently, is yet to make a mention of the new dates.

The 3G auction would start on April 9, 2010, and Wimax bidding would begin two days after the close of 3G auction.

It is believed that the highest authority in the government wants communications minister A Raja to update the status of 3G auction every fortnight. 3G auction has been delayed many times.Despite the government facing a steep fiscal deficit, pegged at around 6.8%, the UPA government failed to conduct the auction by March 31, 2010.

The number of slots that would be put up for auction, the new guidelines/reserve price (if there’s a change) are not known yet.

The delay in the 3G auction has come despite an empowered group of ministers headed by finance minister Pranab Mukherjee brainstorming several times in the recent months, and Prime Minister’s advisor Sam Pitroda being brought in to settle the spectrum issue.

DoT had recently finalised the 3G NIA draft, which was sent to the law ministry for vetting. The Law Ministry had cited “serious legal challenges” in the bidding process if spectrum cannot be made available till September.

As per the DoT plan, 3G auction was scheduled for mid-February, but spectrum for starting the service would have been allocated only around August-September.

Legal experts, including in the law ministry, argued that telecom service providers cannot be expected to pay for spectrum, without a firm commitment from the defence forces on vacation of airwaves, which would be subsequently allocated to telcos.

The new arrangement for spectrum allocation has not been announced so far, but legal complications are not being ruled out.Many telecom service providers have been opposed to a 3G auction this fiscal as either they are focused on expanding their 2G services, or are yet to recover from the impact of the global economic meltdown.

Recently, the CDMA (code division multiple access) lobby had demanded auction of EVDO (evolution data optimised) spectrum along with that for 3G and BWA (broadband wireless access).Officiating director general of Cellular Operators Association of India T R Dua said that the 3G auctions would provide benefits to the entire country.

“The private GSM industry is all geared up to provide high speed internet and wide range of multimedia services. 3G technologies and future enhancements will offer the most expeditious and cost effective means of providing mobile broadband to the masses,” he added.

Tata Teleservices managing director Anil Sardana said, “We are really glad that the government has announced the revised schedule for the 3G auction and we look forward to the entire process being completed within the given time-frame.”

Originally a CDMA player, Tata Teleservices now also offers GSM services