Sunday, October 25, 2009

India 3G auctions: New Date Line Announced

India will launch electronic auctions to allot radio bandwidth for third-generation, or 3G, telecommunications services on Jan. 14.

The government will hold a separate bandwidth auction for broadband wireless access, a document on the Department of Telecommunications, or DoT, Web site said Saturday.

India's DoT said it will auction about four blocks of radio bandwidth in most of the country's 22 telecom service areas.

It will offer three blocks each in the Uttar Pradesh (West) and Himachal Pradesh service areas, and two blocks each in the Delhi and Gujarat service areas.

The government is validating the frequency available across all circles for the auction, DoT said. "Final details of the frequencies to be auctioned will be notified in the notice (that invites applications for bidding)," the note said.

The DoT will also auction one block for telephony services on code division multiple access, or CDMA, technology.

Indian companies holding licenses to offer telephony services would be allowed to bid for 3G bandwidth, the department said. Companies that don't have a license to offer telephony services in India will be allowed to bid, but will have to procure a licence before they commercially launch 3G services.

Foreign telecom companies that don't have telecom operations in India may bid directly or through a majority-owned subsidiary. Such companies--if they win the bid--would have to procure a license to offer telephony services in India before they commercially launch 3G.

India's federal Telecommunications Minister A. Raja had said the government expects to raise INR250 billion ($5.37 billion) from the bandwidth auctions. India plans to sell auction slots of radio bandwidth for 3G services and has set a base price of INR35 billion for one such slot.

DoT said Dec. 21 would be the last day for companies to submit applications for the auctions.

The government won't levy annual spectrum charges for the standalone 3G operators for the first year, but will charge annual spectrum fees ranging from 3% to 8% of adjusted gross revenue for operators who offer both 2G and 3G telecom services.

Telecom companies in India share a percentage of their revenue with the government as charges--known as spectrum charges--for using radio bandwidth for their services.

The existing policy on mergers and acquisitions of telecom companies within a telecom service area would be applicable, the note added.
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