3G reserve prices fixed at Rs 4040 cr

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New Delhi: Paving the way for unleashing of next generation mobile telephony, the government on Friday fixed reserve price of Rs 4040 crore for auction of 3G spectrum, a move that would help it garner at least Rs 32,320 crore.

A consensus between Finance Minister Pranab Mukherjee and Telecom Minister A Raja was arrived as the two met Prime Minister Manmohan Singh for the approval of the reserve price, based on which the process of bidding would start soon.

Initially six private operators apart from state owned MTNL and BSNL would be allowed to offer 3G services that enables high speed internet, videos and many other value-added services on mobile phone.

A source close to the development said the issue would now go to empowered group of ministers for fine-tuning and hopefully the programme for bidding and other details would get a nod soon.

Raja had met Mukherjee earlier this week too as the Finance Ministry was suggesting the doubling of reserve price from Rs 2020 crore being favoured by Department of Telecom and hence the two ministries had got engaged in a discussion for consensus.

While the government would get at least Rs 24,240 crore from six operators that are chosen after the bids, MTNL and BSNL would shell out another Rs 8080 crore, source said.

After the issue is cleared by EGOM, the Telecom Ministry will announce the detailed programme for the auction which will include pre-bid conference in the next couple of weeks, source said.

Sources said the auction may start by the middle of August.

The Telecom Ministry had earlier recommended a reserve or minimum price of Rs 2020 crore which was not accepted by the Ministry of Finance who had asked the Telecom Ministry to double it.

The likely contenders for the 3G spectrum may include Bharti Airtel, Vodafone, Reliance Communication, Tatas and a few other new private telecom operators.

Similarly, on the lines of 3G the Government will also auction spectrum for wireless broadband services known as WiMax.

The Telecom Ministry had recommended pan-India reserve price of Rs 1,010 crore for wireless broadband services whereas Ministry of Finance had doubled it in this case too.

Its was, however, not immediately ascertained where this also figured in the discussions with the Prime Minister on Friday.