The deadlock over the reserve price for third-generation radio frequency auction, vital for services such as video-calling and high-speed internet access on mobile phones, was finally resolved.The empowered Group of Ministers (e-GoM) finalised the reserve price for auction of at Rs. 3,500 crore. The auction will be completed within three months, and the winners will take another 3-5 months to roll out the services.
The EGoM also decided that a total of five players will be allowed to offer 3G services in every circle, of which one slot will be reserved for state-owned telcos BSNL & MTNL. BSNL and MTNL already own and operate 3G services. They will have to match the highest auction price in each circle.The 3G spectrum auction will provide mobile users a host of facilities like video streaming, richer internet connections—basically use of data on phones not possible in the current 2G spectrum and also put behind irritants like call drops and connectivity problems. The group of ministers (GoM), headed by finance minister Pranab Mukherjee, also fixed a reserve price of Rs 1,750 crore for the auction of wireless broadband (WiMax) spectrum.The e-GoM decided to auction only three slots of spectrum for WiMAX services.
The government will earn at least Rs 35,000 crore from the auction. The more aggressive the bids are, the richer will the government be. This will provide some succour to the government which is struggling with its finances with a fiscal deficit already estimated at a high of 6.8 per cent of the GDP. The Prime Minister’s Office and the finance ministry expect 3G services to attract foreign players and generate high revenues.
