Auctions for spectrum for 3G or third-generation telecom services could be delayed from an already rescheduled date of January 30, after the Department of Telecommunications sought legal opinion on whether it should send the finance ministry's suggestion on doubling the reserve price back to the Telecom Regulatory Authority of India for its endorsement.
DoT's website today announced that it will put in a new schedule for auctioning which officials said would depend on when the cabinet clears the 3G policy. The original date for the auction of spectrum radio frequencies that enable wireless communications--was January 16.
DoT has sought its legal advisor's opinion on whether another change in the reserve price requires the regulator's approval, under section 11 of the Trai Act, before being presented to the cabinet committee of economic affairs for final clearance. Depending on the legal advice, the matter could then be referred to the law ministry for further consultation.
Either way, operators are not complaining. Many incumbents, whether of GSM or CDMA technology, have been lobbying the government to delay the process because the market for 3g services is limited and no one has the cash right now.
DoT officials, however, still hope that 3G auctions will be completed before the country goes for elections in two or three months, despite this referral.
In September 2006 Trai had recommended reserve prices of Rs 80 crore for circle A (the big cities), Rs 40 crore for circle B and Rs 15 crore for circle C. DoT, however, decided to double the reserve price under which an all-India licence (that is, for 22 circles) would now cost Rs 2,020 crore.
In accordance with the Trai Act, DoT decision's recommending a higher reserve price was referred back to Trai. The regulator agreed to DoT's recommendations, after which the government announced the guidelines for auction and allotment of 3G spectrum.
A few weeks ago, however, the finance ministry suggested that the reserve price for an all-India 3G licence be raised to Rs 4,040 crore. This was based on fears that the government might be giving out valuable and scarce spectrum cheaply. The government was also apprehensive that it would not be able to achieve its target of garnering Rs 30,000 crore to Rs 40,000 crore from the auction.
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