Communications Minister postpond 3G spectrum auction to next year

[Aadarsh]

The Union Communications Minister, A Raja officially confirmed that the 3G auctions which were originally scheduled to be held in December this year have now been postponed to be conducted on January 2009.

"The 3G auction would be completed by January 15 and the operators would have to pay up by January 31.”

The Finance Ministry too had recently desired the auctions to be completed as soon as possible. Even the Minister had announced last week that the auctions will take place as announced earlier.

But yesterday’s development regarding delaying the 3G spectrum auctioning by about a month has made the wait for the services that much longer.

BSNL and MTNL however stand a chance to gain much required competitive head start over private operators for the launch of 3G services. The two PSUs have been guaranteed 3G spectrum.

[Jigar]

Clearing the air on the contentious issue of charging the incumbent telecom companies for excess spectrum, Communications and Information Technology Minister A Raja today said telcos would have to pay for spectrum beyond 6.2 Mhz

“We’ve decided to go ahead with the increase charge of the spectrum fee, what will be the modalities we will tell later,” he said while speaking on the sidelines of a conference here today.

The issue has been a bone of contention between the GSM and CDMA operators as both parties had expressed strong views and even approached the prime minister for a resolution to the matter.

This move would affect major telecom operators like Bharti Airtel, Vodafone and Idea Cellular, who possess spectrum above 6.2 Mhz, which was allotted to them without any additional cost.

Earlier this year, the Telecom Regulatory Authority of India (Trai) had recommended that allocation of a one-time charge beyond 10 MHz for GSM operators and 5 MHz for CDMA operators should be made by incumbents on a pro-rata basis for each additional MHz of spectrum that they would get.

The regulator had suggested that for every additional MHz beyond 10 Mhz in Mumbai, Delhi and category A circles, the operators should be charged Rs 16 crore.

Further, Raja also indicated that the much-awaited auction of third generation (3G) spectrum could be delayed by 10-15 days. “We will try to complete it by December 31. Because of Christmas and holidays, we could postpone it by another 10 days. However, the deadline is December 31 subject to a little changes,” he added.

The finance ministry had written to the DoT expressing its concern over the delay in starting the auction process.

Commenting on the letter, Raja said: “It is a routine letter, the finance minister asks for a time line usually, that does not mean they are pushing us or asking for a delay. We will finish it (the auction process) by January 15, the operators have to submit the money by January 31.”