Reserve price of 3G spectrum fixed at Rs4040 crore

The government is reported to have fixed a reserve price of Rs4,040 crore for auction of 3G spectrum, which would herald the next generation mobile telephony in the country.

The price was arrived at after finance minister Pranab Mukherjee and telecom minister A Raja met the prime minister Manmohan Singh today.

Telecom minister Raja had earlier said the reserve price for 3G spectrum auction would be fixed at Rs2020 crore. At the revised base price. the government could garner as much as Rs32,320 crore from the auction.

While state-owned MTNL and BSNL would shell out Rs8,080 crore, source said, the government would get at least Rs 24,240 crore from six operators that are chosen after the bids.

Although the date of auction is yet to be decided, the process of bidding is expected to start soon. Telecom ministry sources merely said the auction date would be decided upon soon.

New generation spectrum will initially be allocated to state-owned Bharat Sanchar Nigam Ltd and Mahanagar Telecom Nigam Ltd as also the six major private sector telecom operators.

Allocation of 3G spectrum would allow the service provides to offer high speed internet, videos and many other value-added services on mobile phone.

The empowered group of ministers will go through the pricing details before the auction gets a final nod.

The telecom ministry is expected to invite bidders for a pre-bid conference before a possible auction in August.

Private sector telecom majors, including Bharti Airtel, Vodafone, Reliance Communication, Tata Telecom and a few others are expected to be among the likely contenders for the 3G spectrum auction.

The government will also auction spectrum for wireless broadband services known as WiMax along with the auction of 3G spectrum.

While the telecom ministry had recommended a reserve price of Rs1,010 crore for wireless broadband services, the finance ministry had sought to double that as well.