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Mittal for uniform 3G allocation
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Tells DoT to auction four slots for 3G spectrum across the country, or not at all.

Bharti Airtel chairman Sunil Mittal has asked the Department of Telecommunications (DoT) to auction four slots for 3G spectrum in telecom circles uniformly across the country, whether these are currently available or not. Not doing so would be unfair to both operators and customers, he has argued.

The auction process is slated to start from January 14 and those successful will get 5 MHz of 3G spectrum. While spectrum for four slots is available in most of the 23 circles across the country, there are some like Delhi, Gujarat, Rajasthan and the northeast which have limited or no spectrum available. These have to wait till June-end, when the ministry of defence has promised to vacate another 20 MHz of additional 3G spectrum

Mittal conveyed his view in a strongly-worded letter to P J Thomas, the new DoT secretary, a few days earlier. The letter says auction of only two slots in circles like Delhi and Gujarat will create a scarcity premium in these, putting them at a serious disadvantage vis-a-vis other circles across the country (where four slots are available). “Why should the Delhi customer or the operator suffer the scarcity premium compared to, say, Mumbai?” asks Mittal in his letter.

<img style="float:left; margin:0px 10px 0px 0px;" src="http://www.business-standard.com/newsimgfiles/2009/november/10112009/111009_24.jpg" />These two circles constitute over 20 per cent of the subscriber base and a substantial revenue. A Bharti Airtel spokesperson declined to comment on the letter.

In his letter, Mittal notes that even as the auction is expected to close in February, operators would require some more months to roll out their networks and so, even if there is a delay in getting spectrum till June, it will not be of any serious negative consequence. He has suggested that all four winning bidders get the right to roll out 3G networks in Delhi and Gujarat, with a commitment for allocation of spectrum in June 2010.

As for the two circles of Rajasthan and the northeast, the Bharti Airtel boss noted there are no slots available for auction. He argues that while these two circles cannot participate in the upcoming auctions, efforts should be made to clear four slots in these circles at the earliest, given their urgent development need.

With the ministry of defence suggesting they would be able to vacate additional spectrum only in June next year (instead of November-December this year, as thought earlier), communications minister A Raja and finance minister Pranab Mukherjee have been exchanging words on the issue.

Mukherjee, in a letter in October, told Raja there was no question of delaying the auction, as the income from it was urgently needed for this financial year. And pulled up Raja for delaying the process. Raja’s reply put the onus back on Mukherjee to intervene with the defence ministry to get the additional spectrum vacated on time.

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