New Delhi: Under pressure to charge market-driven price for spectrum, the Department of Telecom, or DoT, may finalize the higher reserve price for 3G services at Rs4,040 crore for pan-India allocation, as recommended by the ministry of finance.
Persons familiar with the matter said DoT is considering the increased reserve price for 3G services as it was also recommended by the Telecommunications Regulatory Authority of India (Trai) that any future allocation of spectrum should be in accordance with the market forces.
DoT, however, has left the final decision to the cabinet.
As per the guidelines for 3G services, DoT has proposed to allocate two blocks of spectrum of five MHz each to all the successful bidders, who would be participating in the auction slated for 30 January.
The industry is divided on the issue with some supporting the 100% hike in reserve price, while others oppose any change days before the auctioning process begins.
Since DoT had allocated 2G start-up spectrum of 4.4 MHz along with the licence at Rs1,658-crore for all-India, one of the mobile operators justified the reserve price of Rs4,040 crore for five MHz of 3G spectrum.
DoT had taken a decision not to auction 2G spectrum as Trai was against such a move, saying any hike in prices for it would favour the existing GSM (Global System for Mobile) operators who have been given radio frequency at the same price as late as in May 2007.
These persons said comments from other ministries on 3G prices were expected in another 3-4 days and by the end of this week, the Telecom Commission may finalize its views on the subject.
In a note sent to telecom secretary Siddartha Behura, finance ministry had said last week, “The reserve price may be increased from Rs2,020 crore to Rs4,040 crore for a pan-India allocation of two blocks of five MHz of 3G spectrum.”
The ministry has also asked to double the reserve price for wireless broadband services, known as WiMAX, to Rs2,000 crore for pan-India allocation. DoT had recommended Rs1,000 crore for the same.
On mobile number portability, or MNP, DoT is working towards meeting the timeline of June 2009 and will shortly issue clarifications to the bidders on the norms, after which it will start accepting applications from the prospective firms to act as agencies for porting numbers.
The bids are scheduled to be opened on 5 February, said an official. The prospective bidders will act as clearing houses for the MNP system.