3G spectrum: decks cleared for auction

Ministries of finance and law give clearance

GN Bureau | February 16, 2010



The hurdles in the way of the third-generation (3G) spectrum auction have been removed, as the ministries of finance and law have given their nod to the move, according to reports.

The finance ministry has cleared the decks for the auction of third-generation (3G) telecom licences by the end of this financial year, by assuring the law ministry that it would ensure all successful bidders the availability of spectrum by September 1, instead of selectively releasing spectrum depending on availability, reported the Business Standard.

This ends a four-month controversy over the auction and assures the government minimum revenues of Rs.30,000 crore from the auction of three 3G licences in each telecom circle for countrywide services, the paper noted.

In its response to the objections the law ministry raised last month, the finance ministry said a high -level committee under the cabinet secretary, as well as the Empowered Group of Ministers (EGoM) under Finance Minister Pranab Mukherjee, will review the progress of the timelines for spectrum availability by September 1, a deadline to which it has committed to all successful bidders under the draft notice-inviting-applications (NIA).

The law ministry has given its approval to the Notice Inviting Application (NIA) that outlines the policy for allocating the air waves, the Hindu Business Line reported.

The delay was the due to differences between the department of telecommunications (DoT) and the defence ministry over the latter breaching a schedule for releasing spectrum for 3G services.

DoT currently has spectrum (the airwaves that enable high speed telecom services) for only two of the three circles for which licences are being auctioned. The defence forces had agreed to release spectrum for the third slot only in September. That would mean two successful bidders would have received spectrum immediately after the auction and the third only in September.

By setting a single spectrum-release deadline for all bidders, the finance ministry aims to ensure a level playing field for all operators.

The 3G auctions for all-India licences were initially scheduled to begin on February 13 but were postponed to a period between mid-February and March 5. It is not clear whether DoT will follow this schedule or announce a new set of dates within the financial year, noted the Business Standard.

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