India's 3G auction elicits global response

India said it has received interest from international companies for launching high-speed 3G telephony services, auction of spectrum or radio waves for which will be completed by this financial year.

"There has been interest from various foreign companies in the planned 3G auction," telecom minister A Raja told reporters in Geneva, exuding confidence that the auction of 3G and Wi-Max spectrum would generate at least Rs 25,000 crore (Rs 250 billion) of revenue for the Indian government.

"The successful 3G bidder wil be issued Universal Service Licence. . . they will be eligible for 2G spectrum also, as and when it is available," he said.

The minister further said that he had talks with telecom ministers and officials from many other countries and all of them were of the same opinion that telecom sector was one of the least hit by the global financial meltdown.

"We are very confident that the government will raise at least Rs 25,000 crore from the auction," Raja said.

Asked whether the 3G auction would meet the timeline, Raja said: "Yes. By and large, we are moving as per the timeline. . . It may get delayed by some time due to Christmas vacation, but very positively it will be completed within this financial year (ending March 2010)."

Asked about defence ministry's reluctance to speedily vacate spectrum, used for its internal communication, Raja said: "The defence ministry has to respect the decision of the group of ministers."

However, no major delays are expected on account of defence ministry's lethargy in releasing spectrum, as the department of telecommunication has adequate spectrum to allocate at least the initial 5Mhz to three players in a circle.

"We have 3G spectrum available in varying amounts in various circles except Rajasthan, where there are no 3G radio waves. Therefore, spectrum availability cannot halt the auction process. Any release by defence would be an additional gain and will help in giving it to more players," a DoT official had said recently.

On August 27, an empowered group of ministers fixed Rs 3,500 crore (Rs 35 billion) as reserve price for 3G spectrum and restricted the number of players to five -- at least initially.

The eGoM also decided on a base price of Rs 1,750 crore (Rs 17.5 billion) for pan-India WiMax (wireless internet) spectrum.