India to hold 3G auction in December

India, one of the world’s largest telecom markets, will launch a much-awaited auction for 3G mobile spectrum on December 7.
 
Bidders must submit any queries on the process before October 8, the Department of Telecommunications said in a release on its web site Sunday. The final date for accepting bids has been set as November 13. Last year, the government had announced its intention to auction permits for 3G services in India, the largest economy in the world to not have them.
 
In August, a ministerial panel set the minimum price for a pan-India permit at 35 billion rupees ($722 million), following months of deadlock over pricing. India’s independent telecom regulator had initially recommended a floor price $250 million for a 3G license. But that amount has risen steadily, despite a global downturn, amid pressures to bring in state revenues to plug the nation’s fiscal deficit hole and because of expected competition.
 
The auction will net India at least 250 billion rupees, Telecommunications Minister Andimuthu Raja said in August. Indian consumers will be able to access high-speed internet and music downloads on their phones through 3G, also expected to boost income for telecom operators in a market with historically low average revenues per user.  
 
Four slots will be auctioned for each of the country’s 22 phone service zones, telecom ministry officials have said, with one additional slot for state-run service providers Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), who are exempted from the auction process.
 
The telecom department has also asked applicants for the spectrum to publish ownership details, amid national security concerns.
 
India had over 441 million mobile subscribers as of July end, and its wireless market expanded at a rate of 3%, according to the Telecom Regulatory Authority of India. With a wireless teledensity of only around 38%, its market can more than double. The 3G auction would open a huge market for foreign wireless equipment makers like Ericsson and Nokia.

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