Bidding for 3G spectrum open; high reserve price disappoints industry

With the government declaring the much awaited 3G spectrum open for bidding to private sector telecom companies, Indians will soon have high-speed data connections and services on their mobiles.

However, the auction reserve price for the four spectrums available has been kept at a much higher Rs3,500 crore than the previously announced Rs2,020 crore, disappointing many in the telecom industry.

The 3G spectrum was cleared by an empowered group of ministers (eGoM) headed by the finance minister in a plan called '4+1' which means there would be four private operators and one public operator (BSNL or MTNL) in telecom circles. The public  carriers have already been sanctioned spectrum use and would be required to match their prices with the highest bids accepted.

The bidding will be concluded within 90 days and the plan does not require cabinet ratification as the eGoM is headed by the finance minister. The actual operations may begin six months after spectrum allocation.

According to S C Khanna, secretary, Association of Unified Telecom Service Providers of India, the hike in base price will make the services costlier to consumers. The entire spectrum should have been made available, and not just restricted only to four, he added.

T V Ramachandran, director-general, Cellular Operators Association of India, said the offer came as a disappointment. According to him, the disparity in the prices of BWA and 3G spectrums also required explanation.