The much-awaited auction of spectrum for the roll-out of third generation mobile phone services is likely to be delayed by more than a month and may now commence from the first week of March next year. The schedule is expected to be announced soon.
 
Official sources said the auction process is likely to start in the last week of February or the first week of March. The revised schedule was being worked out taking into account the outcome of the last meeting of an empowered group of ministers during which the defence ministry was reported to have agreed to vacate spectrum.

Telecom minister A Raja had said last week that the auction would proceed according to schedule (14 January 2010) but with the Department of Telecom (DoT) yet to finalise details of notice inviting applications (NIA), this seems unlikely.

Officials say, it would take at the least five weeks after the fianlisation of NIA to initiate the auction process and considering the year-end and Christmas holidays, NIAs may be issued some time during the middle of January next year.

According to the government's estimate, the auction sale of 3G spectrum would generate over Rs25,000 crore. The government has fixed the reserve price at Rs3,500 crore for pan-Indian spectrum.

Despite the spectrum crunch, the government has decided to auction four slots in addition to the one each already allotted to two telecom PSUs, BSNL and MTNL.

Earlier, the DoT had expressed concern over delay in spectrum vacation by the defense ministry and had suggested in its eGoM meeting that only three slots be auctioned.

The government is expected to allocate spectrum to all selected bidders simultaneously in August 2010 in order to maintain a level-playing field.

The DoT also plans to build an alternate optic fibre network for the defence forces at a cost exceeding Rs9,500 crore to enable the forces vacate their spectrum for commercial use.

According to officials, details as to whether all the winners of 3G bids would be asked to pay up the entire sum upfront or at the time of spectrum allotment would be announced after due deliberations.

Analysts point out that this could be crucial as finance minister Pranab Mukherjee had made a provision of over Rs35,000 crore from sale of spectrum in the current financial year.

The officials said the revised schedule would be announced by the middle of next month.