India to lose $3bn annually due to delay in auction of spectrum: Assocham

New Delhi: India may lose up to $13 billion in revenues by 2012, if the third generation (3G) spectrum was not allocated soon to telecom operators, trade body Assocham has said.

According to CS Rao, chairman, communications convergence committee, Associated Chambers of Commerce and Industry (Assocham), "The telecom industry is losing revenue of $3 billion each year on account of delay in spectrum allocation."

A joint study by Assocham and the Wimax Forum points out that the government was also losing a huge sum of money in terms of import duty and other taxes, as a great deal of equipment and devices needs to be imported for installation of Wimax technology.

Though Wimax technology, which delivers wireless broadband for computers and mobile devices, is available in India it has limited application because of delays in the auction of spectrum. These delays have prevented private telecom operators from providing broadband connectivity to potential subscribers, the study said.

According to the report, the Indian market was expected to support 27.5 million Wimax users by 2012 through 19 million Wimax connections. This number would represent approximately 20 per cent of the global Wimax user base in 2.5/2.3 GHz bands.

Assocham added that the Wimax-embedded netbooks, laptops and desktops should be imported without any additional import duty and the indigenously manufactured Wimax CPEs (customer premises equipment) should be exempted from excise duty and sales tax for at least three years.

CPE is a device installed at the customer's premise to connect the Wimax signal with the service provider.

The Assocham further urged the government to keep the base reserve price of the broadband wireless access (BWA) spectrum low given the global economic trends.