3G auction to be held as per schedule: Govt

Telecom Minister A. Raja said that the Government plans to start auctioning third-generation (3G) wireless spectrum as scheduled from January 14. Spectrum will be given to four successful bidders, excluding BSNL and MTNL. However, all the successful bidders will get 3G spectrum simultaneously only in August 2010. "Auction will be according to the schedule. Allotment of spectrum to maintain the level playing field will be by August 2010," the minister stated. "Allotment to the four service providers will be simultaneous," he added.

Following the empowered Group of Ministers' (eGoM) decision, the Department of Telecommunications (DoT) will soon issue a notice inviting applications for the sale of spectrum. The notice is a legally binding document on the auction and will specify all details regarding the sale of spectrum, including its exact availability in each circle and the specific bands for the winners.

Ratan Tata, Chairman of the Tata Group, has written to a top government functionary saying that all successful bidders should be given air waves simultaneously to keep the playing field level. Tata's observation follows a proposal by the DoT to allocate spectrum to three successful bidders in tranches. According to the DoT's plan, 3G spectrum would be given in phases with the highest bidder in a circle getting it immediately, while the second and third players will get air waves only by July and September 2010, respectively.

Mobile number portability, the facility that allows customers to retain their mobile numbers while changing operators, will be implemented from early 2010. This may affect operators who do not win 3G spectrum as they may see their high-end customers migrating to rivals. The UPA government is keen to hold 3G auctions this financial year as it is targeting to raise Rs300-350bn from the process to help bridge the fiscal deficit. But, if the auction revenue does not come this financial year, the Government's math will go wrong.