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3G, WiMAX spectrum auctions in two months
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New Delhi: One big-ticket exercise of the new government in the next two months could be auctions of spectrum for 3G and broadband wireless access (BWA). The exercise could fetch the government at least Rs 30,000 crore and help it narrow the widening fiscal deficit.

The auctions were slated for January-end, but then a finance ministry suggestion to double the reserve prices had led to the creation of a group of ministers to decide on the issue. Sources in the cabinet secretariat told FE that the reserve price for 3G may be doubled but for WiMAX it would be left untouched, and auctions would be held in the next two months.

Telecom players too want the new government to speed up the auction process. Sunil Mittal, chairman & group CEO of Bharti Enterprises, said, “Auction of 3G and BWA should be expedited by the new government.”

Though foreign telecom operators are unlikely to bid for 3G services, WiMAX could see substantial foreign interest. At least two foreign players, USA’s Clearwire and Russia’s Yota, confirmed to FE their interest in the Indian market. Both are among the largest WiMAX players in their respective markets.

The reserve price for pan-India 3G auction was fixed by the department of telecommunications at Rs 2,020 crore, but the finance ministry felt it should be raised to Rs 4,040 crore. For BWA, the proposal was to raise the reserve price from Rs 1,000 crore to Rs 2,000 crore. Industry experts expect operators to go for 3G spectrum for voice services, since the 2G spectrum availability is scanty and more spectrum is needed to support subscribers for voice usage. For data services like video streaming, WiMAX would be used. Some vendors have started manufacturing handsets that support both 3G for voice and WiMAX for data. The cost of deploying a WiMAX base station is about a tenth of deploying a 3G network. Post-auction, operators can start WiMAX operations within 90-120 days, while 3G services would take about six months to begin. State-owned BSNL and MTNL have already been allocated 3G spectrum, and have started the services in a phased manner.

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