Spectrum for 3G will be auctioned: govt

Spectrum for 3G will be auctioned: govt

India will auction the airwaves needed to offer so-called third generation, or 3G, mobile phone services, Union telecommunications minister Andimuthu Raja said. He did not specify when the frequencies would be auctioned.

Raja said companies without a telecom licence could bid for the spectrum, as could foreign firms if they receive security clearance. He added that 3G operators would not be allowed to merge in the first five years of operation.

Only three telecom operators will initially be allowed to offer 3G services, D.S. Mathur, secretary at the department of telecommunications, or DoT, said. The country may eventually permit five, he added.

Industry experts, who did not wish to be identified, said the Centre could easily earn more than $3 billion (Rs11,790 crore) by auctioning the three 3G licences of 10MHz each.

In its August recommendations, the Telecom Regulatory Authority of India, or Trai, had suggested that only incumbent telcos offering 2G services be allowed to bid for 3G licences.

Apart from their bids, firms that win 3G licences will have to pay “additional spectrum charge of 0.5% of revenues to be shared as the recurring annual spectrum charge... (starting)... three years from the date of spectrum assignment", said a DoT release.

In another significant development on Monday, DoT accepted Trai’s November 2006 recommendation on mobile number portability, or MNP, which will allow consumers to retain their numbers even when they switch operators.

The government’s decision to allow number portability is seen by the Cellular Operators Association of India (COAI), a lobby for GSM (the dominant mobile technology platform) firms as a move to “benefit a select operator desirous of entering the GSM segment...", said T.V. Ramachandran, director general of COAI.

On Monday, the government also announced that it would auction spectrum for wireless broadband services.

Reuters and Bloomberg contributed to this story.