Govt expects to earn Rs450bn from 3G, BWA auctions

The Government expects to pocket Rs450bn from the auction of airwaves for 3G mobile services and high-speed broadband services, Telecom Minister A. Raja has been quoted as saying by a business daily. In the Union Budget, announced in end-February, the Government estimated that it will earn Rs350bn from the combined auction.

The auction for 3G spectrum will begin in a few minutes and last for several days till winners for all the circles are picked. It will be an e-auction involving multi-stage bidding over the Web. Though winning bidders have to deposit money in 10 days of the auction, they will get 3G radio waves only in September.

The operators will have to match DoT’s base price, which will be revised at each round. The revisions can range between 10%-1% over the previous round’s price depending on demand. Each slot in each service area will be auctioned separately but simultaneously by the auctioneers, Rothschild and DotEcon.

Six mobile companies - Bharti Airtel, RCOM, Vodafone, Idea, Tata Tele and Aircel are expected to compete for the three pan-India 3G spectrum allocations. The remaining three bidders in the race for 3G spectrum are Videocon, S-Tel and Etisalat.

Bidding for broadband spectrum will begin two days after the completion of 3G spectrum auction. The Government has received applications from 11 companies for the BWA spectrum.

The base price for pan-India 3G airwaves has been pegged at Rs35bn, while for BWA airwaves, it is Rs17.5bn. The Government will auction three slots of 3G airwaves in 17 telecom services areas and four in the other five zones. Only two slots will be up for grabs for broadband airwaves.

MTNL and BSNL have already been awarded spectrum for both 3G and WiMax services but they will have to match the highest bid for each of the services.