The Telecom Ministry has finally set the 3G ball rolling. Despite requests for delaying the auction by many international telecoms, the government has actually brought the date forward with the auction now set to start on January 16. But, the companies bidding for 3G will need a minimum amount of Rs 1380 crore.
Just a day after, MTNL launched the country’s first 3G service the government has set in motion the process for allowing private telcos to enter the 3G market in India.
The department of telecom (DoT), in its ‘information memorandum’ has also said that the auction of spectrum for Broadband Wireless Access (BWA), which supports technologies such as WiMax, will be held two days from the close of the 3G auctions.
The government has issued the information memorandum on 3G asking bidders to submit final applications by 5th January the auction for 3G will start on January 16 much earlier than anticipated.
Third-generation mobile technology, or 3G, will allow telecom companies to offer high-end services such as high-speed internet, interactive gaming, ultra fast downloads of movies, video clips and music files, video calls all on the mobile. WiMAX is a technology that allows the user to access high speed internet and other data applications wirelessly.
The government’s ‘information memorandum’ has for the first time provided clarity on the quantum of spectrum available for 3G auctions. So while the spectrum crunch in Delhi will mean no more than 2 private GSM players can offer 3G services, Mumbai, India’s most lucrative telecom market will see at least 4 GSM players offering high end 3G services.
State-owned telcos -- BSNL and MTNL have already been awarded 3G and WiMAX spectrums across all cirlces. Most other circles will see four private GSM players and BSNL offer 3G services, except Gujarat and Himachal which has sufficient spectrum for only three private players, UP (West) for 2 and West Bengal which only a single private player can be accommodated.
The DoT has also clarified that with regard to WiMAX spectrum, three private players could be given these frequencies in each of the 22 telecom circles in the country. The auctions will be a four stage process—invitation stage, pre-qualification, biding and grant of spectrum. Existing Indian operators as well as some foreign telcos are expected to participate in the upcoming 3G and WiMAX auctions. The DoT has also said that foreign players can bid as 100% entities.
However, a foreign player entering the Indian telecom market as a 100% entity needs to find an Indian partner to hold a 26% stake in the joint venture before it launches commercial services. Further, in a bid to encourage foreign telcos to participate, the DoT has also said that mobile number portability would introduced soon.
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