3G spectrum bids to start at 3500 crores

The deadlock over the reserve price for third-generation radio frequency auction, vital for services such as video-calling and high-end internet access on mobile phones, was finally resolved on late thursday when the empowered group of ministers (EGoM) headed by finance minister Pranab Mukherjee fixed it at Rs 3,500 crore. This means, any telecom company bidding for India 3G spectrum will have to pay a minimum of Rs 3,500 crore as the auctions will begins at this price. It has also come to notice that Indian government is planning to up the mark of base price of the bidding.

The price set by a panel of ministers announced late Thursday is much higher than the price originally proposed by the Telecommunications Regulatory Authority of India (TRAI) of 20.20 billion rupees.

The government will complete the auction of 3G spectrum within three months and is expected to raise 250 billion rupees from the sale of frequencies for both 3G and WiMax.


India's is the  world's fastest growing mobile market and has already the 3G auction has been postponed twice. Mobile operators criticised the price for pan-India 3G spectrum as too high. Companies vying for the fourth-generation licences face a minimum entry price of 17.5 billion rupees, up from 10.10 billion announced last year, Raja said. India aims to sell four 3G licences and three broadband wireless access licences in 20 of the 22 telecom zones.

The Rural areas is going to get a great boost and the penetration will be more with the introduction of 3G and Wimax, wireless broadband. With the mobile sales boom, there is a dearth of spectrum has become a issue with the Indian cellular operators who are eager to get next-generation frequencies to ease airwave congestion in the country of nearly two billion people.