New Delhi: India may have to wait longer than expected for the start of the third?generation (3G) mobile services as the defence forces may not be able to vacate the necessary spectrum by September as promised.
The vacation of the spectrum is dependent on the readiness of the Rs10,000 crore alternate optical fibre cable network being built by state-owned Bharat Sanchar Nigam Ltd (BSNL). The tender for the work that was to have been issued in December has only just been issued, resulting in deadlines being missed and putting off the start of 3G services, spectrum for which is currently being auctioned.
“We had been given time till December to publish the EoI (expression of interest), but were unable to,” a BSNL executive said on condition of anonymity. “The tender was uploaded...last week.”
BSNL was to have originally published the tender by July, a month after a memorandum of understanding was signed between the ministry of defence and the department of telecommunications (DoT). This was delayed by six months to December due to the strict security conditions imposed by the defence ministry.
The winners of the 3G auction, which started on 9 April, will be assigned frequencies when they pay the complete bid amount, but will only be able to start commercial operations after 30 September, according to DoT’s terms.
BSNL had issued a tender for the supply of equipment in December, but short-listed vendors complained that the specifications were too stringent. The tender was issued after the cabinet committee on economic affairs cleared the proposal. BSNL then had to write to the defence ministry in February asking that some of the norms be eased.
The terms in question included vendors having to be listed companies with their own manufacturing facilities within the country and the use of a particular kind of optical fibre cable manufactured by just a few firms, according to BSNL officials.
Bids for 3G have reached dizzying valuations with the price of one national slot of 5Mhz of spectrum going for as much as Rs10,749 crore.
The auction itself has been delayed for around two years due to differences between DoT and the defence ministry over a clause regarding penalties the government might have to pay the winning bidders in case spectrum can’t be allocated by September.
“If the winning operators are not able to offer 3G services as per the specified time, the government will lose a huge amount of investor confidence,” said a Mumbai-based analyst with an international brokerage, who declined to be named.