India Expected to Push Ahead with 3G License Auction

India's telecoms minister, A Raja has confirmed that the oft-delayed auction of 3G licenses remains a top priority at the Communications and IT Ministry. He was reconfirmed as the minister in charge following the government's reelection in India's recent elections.

"Auctioning of 3G spectrum is on top of my priority list," Raja told the Press Trust of India immediately after announcement of the portfolios. Asked about the schedule for auctioning of 3G spectrum, the Minister said the DoT would take the proposal in the Cabinet at the earliest.

The auction was expected to start on Jan 16th, when it was suddenly delayed until Jan 30th - and then delayed indefinetly.

Separately, a Department of Telecoms (DoT) spokesman also confirmed their intention to push forward with the 3G license auction. “3G auctions will definitely be held this year and sooner rather than later”, he told The Economic Times.

“3G auctions also carry the all round support of policy makers, including the finance ministry which needs to bridge the fiscal deficit, one of the biggest drawbacks in India’s balance sheet”.

The DoT had been preparing to auction the 3G licenses with a pan-India reserve price of Rs 2,020 crore (US$412 million), but the Finance Ministry wants to double that figure to a point which in a competitive auction could see the licenses sell for over US$1 billion each.

The two state owned operators, BSNL and MTNL have already been granted 3G licenses - and will have to match the final price paid by the winners in the commercial 3G auction.

On the web: The Economic Times

Posted to the site on 29th May 2009