Spectrum tussle to end with 3G auction

Union communications and IT minister Andimuthu Raja's confirmation yesterday to reporters that the much-delayed 3G wireless spectrum would definitely be auctioned by the year-end, is expected to bring the curtains down on a saga of tussles and delays that seems to have become endemic in the Indian telecom sector.

However, even earlier in August last year, Raja had said that the auction process for the 3G spectrum – a service that allows voice, data and video to be transmitted at high speeds to wireless devices, would most likely be completed by October-end of 2008, and that 3G services could possibly start by the end of the year 2008. (See: 3G roll-out most likely by year end)

The minister had said at the time that there was inadequate competition when the auction was announced in August, since only two slots of spectrum were available, which had lead to objections from the Telecom Regulatory Authority of India (TRAI).

In January 2009, the auction was again put off after the finance ministry wanted to increase the bidding price on the ground that the telecom stake sales value had increased substantially from the time the auction was originally announced in August 2008.

But assuring reporters this time that the auction would definitely go through by the year-end, the minister said that the auction would raise up to Rs40,000 crore, which could help the finance ministry in bridging the country's fiscal deficit.

However, even the pricing and other aspects of the 3G auction have still not been completed, though industry commentators expect 3G spectrum auction could potentially fetch the government a minimum Rs30,000 crore.

In December, the Cellular Operators' Association of India (COAI), the GSM operators' body, had opposed the telecom regulator's recommendation for levying an additional 2 per cent charge on 3G spectrum saying it is a ''retrograde step''. The COAI also said that this would only add to the financial burden of the service providers. (See: DoT and telcos unhappy with administration charges for 3G)

The TRAI had then advised the department of telecommunications about a series of changes that needed to be made in the rules for 3G spectrum and among the changes, the regulator had recommended an annual administrative fee of 2 per cent of the highest bid amount for 3G.

Currently, only BSNL and MTNL are only two government entities that are providing limited 3G service in selected cities in the country.

The minister, however, said that he is not aware of the current status of the auction as most of the ministers who were part of the GoM (Group of Ministers) have either changed or are not there any longer.

3G allows communication supports higher data transmission speeds, facilitating faster communication, internet and data services. It would allow telecommunication companies to offer new services such as video downloads, high-speed internet connection on mobile devices, video calls, interactive gaming, and wireless broadband access on portable internet devices.

In an era, where countries like Australia, the UK, the US and many other European nations, where broadband companies are supplying broadband speed of over 20 Mbps, India is lagging far behind with an average high speed of 2 Mbps and in rural areas, this speed does not go beyond 500 Kbps.

As far as the issue of mobile number portability is concerned, he emphasised that it would be implemented in October.

Mobile number portability allow users to switch operators without changing their original cell number.