Broadbandindia Magazine

Mobile network operators girded their loins for a fight after the government appeared to have settled on what they believe is a very high price of Rs 4,040 crore for the long-overdue auction of third-generation (3G) spectrum, vital for services such as video calling and highspeed internet access on mobile phones. The minimum bid amount for pan-India spectrum is double of that recommended by the telecom department and aligns with the finance ministry’s proposal, as the government tries to maximise the revenue it can earn from the auction.

A top government official said communications minister A Raja and finance minister Pranab Mukherjee reached a consensus on the reserve price for the 3G auction. Executives with major telecom operators said the Cellular Operators Association of India (COAI) – the industry body representing companies that provide mobile services based on the GSM standard – would protest against the decision on the reserve price.

Telcos are readying to lobby hard with the government to reduce the base price to at least Rs 3,540 per player, as most of them had factored this number in their calculations as both DoT and the finance ministry were close to reaching an agreement on this price.

Indicating that the reserve price was on the higher side, Aircel CEO Gurdeep Singh said: “Telcos may restrict their 3G offerings to metros and category A circles.” Category A circles are lucrative circles like Tamil Nadu, Maharashtra and Andhra Pradesh. Tata Communications, which is betting big on WiMAX technology for wireless broadband, said the reserve price would act as an entry barrier.