New Delhi: India is unlikely to auction so-called third generation (3G) mobile phone services before the coming general election is completed, a senior government official said. The government had earlier expected to raise as much as Rs40,000 crore from the auction.
Analysts and industry executives have expected a delay even though communications and information technology minister A. Raja, as recently as 17 February, said he expected the auctions to be held by end-March. India goes to the polls in five phases beginning 16 April.
“It looks difficult,” S. Behura, secretary of the department of telecommunications (DoT) said on the sidelines of an industry event, when asked if the auction would take place under the present administration.
Apprehensive: DoT secretary S. Behura. The auction of 3G radio spectrum for 20 of India’s 22 telecom service areas has already been delayed twice after the finance ministry suggested doubling the starting bid. Harikrishna Katragadda / Mint
The auction of 3G radio spectrum for 20 of India’s 22 telecom service areas has already been delayed twice after the finance ministry suggested doubling the starting bid or reserve price.
On 12 December, DoT first set an auction date for 16 January, a deadline that was then postponed to 30 January after which it was pushed back again without a specific date set. “This is a clear signal that auction (process) has gone into a limbo; I don’t expect it before September or so,” a top executive of a multinational telecom firm had said then, asking not to be named.
On 6 March, the Union government announced the formation of a group of ministers to look into the issue of the reserve price and to fix the number of competitors per telecom mobile service area before the auction is held.
The ministerial group headed by external affairs minister Pranab Mukherjee is, however, yet to meet even once. Besides Raja, the group includes railway minister Lalu Prasad, Ram Vilas Paswan, who holds the portfolios of chemicals and fertilizers as well as steel, agriculture minister Sharad Pawar, defence minister A.K. Antony, law minister H.R. Bhardwaj, minister of state for information and broadcasting as also external affairs Anand Sharma, and deputy chairman of the Planning Commission Montek Singh Ahluwalia.
The group was formed after the Cabinet Committee on Economic Affairs failed to reach a consensus while considering a DoT proposal on the auction of 3G spectrum.
DoT had set the reserve price at Rs2,020 crore for a 3G licence and spectrum rights nationwide and half that amount (Rs1,010 crore) for broadband access technologies such as WiMax. The finance ministry had proposed to double those reserve prices.
The government had expected to raise Rs30,000-40,000 crore from the auction, minister of state for communications Jyotiraditya Scindia had said late last year when the 3G bidding policy was annou-nced. That expectation was scaled down to Rs20,000 crore in the government’s revenue estimates in the interim budget presented in Parliament late February.
A regulatory expert said DoT and the government could still pull off the auctions before the elections if policymakers put their mind to it, even though the task would be tough. “It is difficult with the elections less than two months away but not impossible,” said Mahesh Uppal director of Com First (India) Pvt. Ltd, a telecom consultancy.
“The GoM can announce the dates and then the bureaucracy can take over. The process of selecting the winners or the processes after the auction may happen after the elections, but that should not matter.”
Uppal said DoT and the government were under pressure from different lobbies, some seeking to slow the process and some to accelerate it. “If pressure was not there then it would not be difficult as the auction process is mainly an administrative thing,” he added.