Allocation of 3G licences through auction: Raja

All players, including foreign companies, can bid

NEW DELHI: Third-generation (3G) mobile services could be rolled out soon, as the government on Monday announced that the auction route would be followed for allocating licences.

3G refers to the next generation of mobile networks that will combine wireless mobile technology with high data rate transmission capabilities.

So, 3G-enabled mobile services could high resolution video and multi-media services in addition to voice, fax and conventional data services.

Although on Monday morning Telecom Regulatory Authority of India (Trai) chairman Nripendra Misra said at a conference organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) that auction for 3G should be open to the existing 2G telecom operators only, the government was clearly of a different view.

Communications minister A Raja told the media at a press conference the same evening that 3G auction would welcome all, including those who do not offer telecom services currently and even foreign players.

Foreign players would be allowed, subject to home ministry clearances, sources added. The statement issued by the Department of Telecom (DoT) was, however, silent on the eligibility conditions.

In a parallel development, it is learnt that letters of intent (LoIs) are being finalised for nine applicants for 2G telecom licence.

They include Idea Cellular, Aircel, Shyam Telecom and Spice, it is learnt. The LoIs that are being finalised are for those applications made before September 25, 2007.

However, an industry source pointed out that these LoIs seem to be “without any intent” as it is a tough call to allocate spectrum to all nine players even as the government was collecting the licence fee.  

Elaborating on the 3G guidelines, DoT sources said that, initially, around three operators in every service area are likely to get the spectrum of around 10 Mhz each through the auction route for 2.1 GHz band, that is meant for GSM.

However, if each operator was to get 5 Mhz of spectrum, then around six players could be accommodated for offering 3G services. Around 30 Mhz of 3G spectrum is available with the DoT, officials said.

The guidelines state that CDMA spectrum in 800 Mhz band would be treated separately from 2.1 GHz spectrum. However, if CDMA service providers ask for EVDO carrier of 2X1.25 MHz, they would have to pay an amount proportionate to the highest bid for spectrum in 2.1 GHz band.

How state-owned telcos like BSNL and MTNL would get 3G spectrum is not clear yet. But, sources said that one slot in 3G is likely to be reserved for a PSU telco.

The 3G licences would be granted through a controlled, simultaneous ascending e-auction by a specialised agency to ensure transparency.

There will be a one-time spectrum charge, and also an annual revenue-share of 0.5% of an operator’s adjusted gross revenue with the government.