India's government has said that it will allow foreign companies to bid for the forthcoming 3G licenses on their own, but will have to find a local partner when they launch services. The government restricts foreign ownership of a telecoms operator to 74% of the firm.
"The foreign telcos can bid for the 3G spectrum on their own but before rolling out services they should find an Indian partner," Telecom Secretary Siddharth Behura told reporters.
The move is expected to increase competition in the auction as it enables opportunistic bidders to participate without the upfront hassles of finding a partner. If they win, they become desirable in their own right, and if they lose they have not wasted weeks in corporate negotiations with the prospective Indian company.
Any new entrant will however be required to pay an additional Rs 1,650 crore (US$375 million) to acquire a basic license in addition to the money they bid for spectrum needed to offer 3G services, if they are unable to partner with an existing telecoms operator.
The Department of Telecommunications has also fixed the reserve price for the licenses at Rs 160 crore (US$37.6 million) for metros and category A circles, Rs 80 crore (US$18.8 million) for category B, and Rs 30 crore (US$7 million) for C circles. The reserve price for a pan-India license is Rs 2,020 crore (US$475 million).
There will be between three and five licenses awarded initially and a further five allocated at a future date. Two licenses have been reserved for the state controlled operators, BSNL and MTNL, both of whom will get their licenses immediately, with the auctions for the initial licenses due within a couple of months. Both of the state owned enterprises will be required to pay a license fee which is equivalent to the highest price paid in the auction.
India has 60 MHz of 3G spectrum available, and will allow both WCDMA and CDMA based 3G services.
Posted to the site on 18th September 2008
Posted to: www.cellular-news.com/story/33700.php