3G spectrum reserve price fixed at Rs. 3,500 crore

Rs. 1,750 crore is base price for WiMAX spectrum: e-GoM

Only 5 operators allowed per telecom circle

Auction may fetch over Rs. 25,000 crore: Raja

NEW DELHI: Ending all confusion over the pricing of spectrum for 3G services, the empowered Group of Ministers (e-GoM) on Thursday finalised the reserve price for auction of radio waves for next generation mobile services at Rs. 3,500 crore.

The e-GoM, headed by Finance Minister Pranab Mukherjee, decided to allow a maximum of five 3G operators per telecom circle, including a government-owned company (BSNL or MTNL). It fixed the base price for pan-India WiMAX spectrum for wireless Internet at Rs. 1,750 crore, and decided to sell only three slots initially.

Talking to journalists after attending the meeting here, Communications and Information Technology Minister A. Raja said spectrum auction for both 3G and WiMAX services would be completed within 90 days, paving the way for faster and more efficient mobile and Internet services.

On revenue generation from the entire auction, he said the government was likely to earn over Rs. 25,000 crore. As only four private operators were allowed to offer 3G services per circle, the auction price could still go higher.

The Minister clarified that both BSNL and MTNL, which were already offering 3G services, would have to match the price quoted by the successful bidders in each circle.

In the 2009-10 budget, Mr. Mukherjee estimated a revenue generation of Rs. 35,000 crore from the auction process.

The e-GoM decided to auction only three slots of spectrum for WiMAX services in the first phase.

The issue of 3G spectrum auction had been hanging fire as the Finance Ministry and the Department of Telecom failed to arrive at consensus on the base price.

While the DoT suggested Rs. 2,020 crore as the reserve price for 3G spectrum and Rs. 1,010 crore for WiMAX, the Finance Ministry insisted on Rs. 4,040 crore and Rs. 2,020 crore, leading to the delay in private players rolling out both services.

Thursday’s meeting was attended by Home Minister P. Chidambaram, Agriculture Minister Sharad Pawar, Information and Broadcasting Minister Ambika Soni and Planning Commission Deputy Chairman Montek Singh Ahluwalia,