New Delhi: Spectrum crunch may force the government to allow only three private operators to offer 3G services in a circle and said that successful bidders will have to make 100% payment by 10 March.
Even the empowered Group of Ministers (EGoM), headed by finance minister Pranab Mukherjee, in its last meeting had taken a decision to this effect, says minutes of the meeting.
This would mean that the government may not get the targeted Rs25,000 crore from sale of radio waves needed for third generation telecom services in case only three blocks were auctioned.
According to the minutes of the EGoM meeting, held on 21 December 2009, “DoT will auction 3 or 4 blocks each of 2x5 MHz of 3G spectrum pan-India (excluding one block assigned to BSNL/MTNL) subject to availability of spectrum.”
Immediately after the EGoM meeting, telecom minister A Raja had announced that four blocks of 3G spectrum would be auctioned.
On the issue of payment to be made by the operators, the DoT has cleared the air that the successful bidders would have make entire payment of 3G spectrum by 10 March and in case of WiMax by 20 March this year (within current financial year).
The government has fixed reserve price for 3G spectrum at Rs3,500 crore for pan-India and Rs1,750 for WiMax services. DoT is likely to issue Notice Inviting Applications (NIA) on 10 January start the auction of 3G spectrum on 12 February and complete the process on 5 March 2010.
The DoT has already got 10 MHz of spectrum from the defence and five MHz will be released by 31 March and another five MHz by August this year. This makes total 20 MHz of radiowaves available with DoT.
Out of this one block has already been given to BSNL/MTNL leaving spectrum sufficient for three players only.
“All the blocks of 3G spectrum to be auctioned would be allotted to the successful bidders immediately after auction and assigned for use from August 2010 simultaneously,” the EGoM minutes said.
Raja could not be contacted for his comments.
On the payment issue, DoT officials said that the bidders would be asked to deposit 25% of the bid amount by 28 February and the balance by 10 March in case of 3G and for the Wimax spectrum the schedule is 25% to be paid by March and the remaining by 20 March.