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DoT ignores ministry plan, retains reserve price for 3G

DoT ignores ministry plan, retains reserve price for 3G
PTI
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First Published: Sun, Sep 14 2008. 10 13 PM IST

Tall aim: The government is looking at generating close to Rs40,000 crore from auctioning spectrum for 3G, or third generation, services. Harikrishna Katragadda / Mint
Tall aim: The government is looking at generating close to Rs40,000 crore from auctioning spectrum for 3G, or third generation, services. Harikrishna Katragadda / Mint
Updated: Sun, Sep 14 2008. 10 13 PM IST
New Delhi: The Department of Telecom, or DoT, has ignored the finance ministry’s suggestion to raise the reserve price of spectrum for so-called 3G, or third-generation, mobile services to Rs2,500 crore, saying that the auction process would discover the best price.
“DoT has carefully considered the suggestion of the ministry of finance to raise the reserve price from Rs2,200 crore to Rs2,500 crore but maintained status quo since the ascending order auction would in any case discover the price in consonance with market conditions,” a person familiar with the matter said.
Tall aim: The government is looking at generating close to Rs40,000 crore from auctioning spectrum for 3G, or third generation, services. Harikrishna Katragadda / Mint
Kept at the rate of 1% on incremental revenue due to 3G mobile services, DoT is planning to have a detailed discussions with the stakeholders to evolve a formula for fixation of annual spectrum charge.
These persons said DoT may consider segregation of revenues generated from 2G and 3G services to work out the annual spectrum usage charges. This would be necessary to maintain transparency in disclosing the revenues from different services for the purpose of working out annual spectrum usage charge and licence fee paid by telecom service providers to the government.
Even as DoT has initiated the process to appoint an e-agency to conduct the auction of spectrum for 3G services, the government would also simultaneously work on these issues and may incorporate changes in the guidelines shortly.
The government is looking at generating close to Rs40,000 crore from auctioning spectrum for 3G services.
Earlier, the ministry of finance had complained that it has not been consulted on DoT guidelines on auction and allotment of spectrum for 3G and WiMax telecom services.
However, in response telecom secretary Siddartha Behura had also shot off a strongly worded letter last month to the finance secretary for questioning the procedure for 3G guidelines, saying the policy announcement was made after due consultations and there was no departure from the cabinet decision.
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First Published: Sun, Sep 14 2008. 10 13 PM IST