3G roll-out set to hit roadblock

Corporate Bureau
Posted: 2008-06-02 21:31:41+05:30 IST
Updated: Jun 02, 2008 at 2131 hrs IST

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New Delhi, Jun 1 : It is now a group of ministers which will take a call on whether foreign and domestic companies can participate in the auction for 3G spectrum. The attorney general of India, who was asked by the government to sort out the issue, has made this recommendation.

This means the roll-out of 3G services may not happen during the UPA government’s remaining term. Bids can only be invited after the ministers’ group takes a decision. Given the timeline usually required by companies to roll out the services, which is a minimum of seven to eight months, 3G is unlikely to happen in the immediate future.

Minister for communication and IT A Raja had recently said the roll-out would be completed by January 2009.

The latest twist in the 3G auction business follows the difference between the department of telecommunication and the Telecom Regulatory Authority of India. The department, supported by the finance ministry, favours the inclusion of new players in the auction, but the regulator wants no new participants in order to avoid complications. The DoT had asked the Attorney General to decide whether foreign and new domestic players be allowed to participate in the 3G auction.

As reported by FE earlier, there were technical constraints in allowing new players to participate in the auction of the 3G services. Allowing new foreign players, for instance, would entail granting of a unified access service licence (UASL) to them for 3G services. If the licence is provided, the government will find it impossible to stop them from competing with the existing 2G service providers in the country, except through an amendment of the licence terms, which could be challenged in a court.

The DoT and the finance ministry had felt that more players be allowed as that would generate more revenue for the government for a resource so scarce.

But Trai had been of the view that, since the existing companies already had the requisite infrastructure in place, there were enough players to bid competitively for the scarce resource. It also felt that allowing new players would needlessly delay the roll-out of 3G.

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