Finance minister Pranab Mukherjee?s determination to hold the much-delayed and awaited 3G spectrum auctions within this fiscal, as reported by this newspaper on Friday, is a step in the right direction. If the FM is successful in holding the auctions within this timeframe despite the non-cooperation of the defence ministry in vacating the required spectrum and resistance from sections of the telecom industry, he would be putting the telecom sector on the right track.
The FM?s resolve may be due to the overriding revenue considerations as the fiscal deficit is at its 16-year high of 6.8%. In this context, the Rs 35,000 crore budgeted from the auctions means a lot. But more importantly, the auctions would send out the right signals on government?s intent of moving towards 3G and WiMAX services in the country. It?s been more than three years since the first step was taken towards the move. This time around the noise that the auctions would get delayed came at a time when several operators providing WiMAX services for faster broadband had tied up funds from international banks. Naturally, the disappointment was such that the WiMAX forum immediately urged that spectrum for broadband wireless access be de-linked from 3G spectrum. Since spectrum for WiMAX is available, it makes sense to de-link the two.
The delay in holding the auction has also sent wrong signals in a sector where the overall aim and direction is to move towards auction of all spectrum, including for the current 2G services.
The flip-flops on the 3G issue should be enough for the government to learn the right lessons. Though it made amendments in the original recommendations of the Trai by allowing new telecom operators from overseas to participate in the 3G auctions, none have shown any interest so far purely because the policy framework is in a mess, with several issues complicated.
Interestingly, the delay caused so far has also brought to the fore an almost comical situation?Trai has started a pre-consultation process to start 4G services, which is the stage after 3G, providing even faster download speeds!
rishi.raj@expressindia.com
