Home >Companies >Govt nod for 3G rules likely, but auctions may remain on hold

New Delhi: India is likely to announce its policy on 3G, or third generation, mobile phone services. by early next week after Prime Minister Manmohan Singh and telecom minister Andimuthu Raja meet to sort out a contentious issue of letting foreign firms bid for such licences.

“The meeting is not yet confirmed and may also happen early next week," said a senior official in the communications ministry asking not to be identified.

Separately, telecom secretary Siddarth Behura, at the sidelines of an industry event, confirmed a decision is expected soon.

Behura said auctions for 3G licences may take six months from the date the policy is announced.

Raja, who supports the entry of new foreign players in the auction, is expected to discuss the merits of allowing or keeping out foreign companies at his meeting with the Prime Minister.

A 3G mobile phone service allows high speed data connections to enable services such as live video, Internet surfing, email and other data-heavy applications on a mobile phone.

Global firms such as AT&T Inc., Deutsche Telekom AG and NTT DoCoMo Inc. have shown interest in entering the Indian market, the second largest in the world by mobile phone customers after China.

Although the country’s telecom regulator has argued against the entry of new licensees into the business to keep out unsustainable bids by overzealous entrants, both the department of telecommunications, or DoT, and finance ministry favour opening up the bidding to new aspirants to keep the sector competitive and earn more revenues through licence fees.

The draft guidelines DoT has prepared suggest auctioning licences by regions with base bidding prices between Rs7.5 crore and Rs160 crore depending on the radio spectrum allocated. The Economic Times reported this base price first on Wednesday.

A telecom expert said the auction may not take place under the current government’s term.

“The present government may go in for early elections in November this year or may extend till February 2009. So even if the policy is announced now, the government cannot have the auctions as the electoral code of conduct will not allow them," said this person, asking not to be named.

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