India Delays 3G License Auction - Again

The troubled auction of 3G licenses in India has had another set-back today after a terse note was posted on the Department of Telecommunications' website stating simply that the auction date has been postponed. No reason has been given, or any indication of when the matter will be resolved.

This is the second delay to the auctions - as at the end of December, the Department of Telecom (DoT) announced that the auctions, which were scheduled to start on Jan 16th, had been postponed to Jan 30th, as the government has not yet approved some key parameters.

While the government is silent on the latest problem - local media are speculating that an ongoing row between India's Ministry of Finance and the Ministry of Communications & Information Technology over the reserve prices for the auction has flared up again.

The Ministry of Finance is known to have been arguing that the reserve price should be nearly doubled - while the Ministry of Communications wants the floor to remain as it is in order to encourage as many companies to bid as possible.

The current reserve price is US$412 million for licenses which would cover all the available circles.

Auctions for WiMAX licenses will commence two days after the 3G licenses are sold, whenever that ends up being.

Posted to the site on 13th January 2009