Govt to raise Rs 25K cr from 3G

Written by Agencies | New Delhi | Updated: Aug 28 2009, 01:03am hrs
Paving the way for moving to the next generation of mobile services, an empowered Group of Ministers today fixed Rs 3,500 crore as reserve price for 3G spectrum to be given to a maximum five players initially.

The eGoM also decided a base price of Rs 1,750 crore for pan-India WiMax (wireless internet) spectrum and the auction of both will be completed within 90 days, Telecom Minister A Raja told reporters.

I do feel that the Government of India, putting together 3G and Wimax, will easily get Rs 25,000 crore, he said after over a hour-long meeting of the eGoM.

The eGoM, headed by Finance Minister Pranab Mukherjee, decided that five slots in 3G spectrum would be auctioned and amongst the five, one lot has already been allotted to BSNL or MTNL, the minister said, adding that four more slots would be auctioned.

He, however, said that with only four more slots to be sold, the players are likely to bid higher for the frequency.

The eGoM lowered the base price to Rs 3,500 crore for pan-India 3G spectrum, from the earlier level of Rs 4,040 crore decided by Raja and Mukherjee, after representations from the private players and their respective lobbies.

The Telecom Ministry will now announce the detailed programme for the auction, which will include pre-bid conference in the next couple of weeks, a source said.

Compared to five slots in 3G space, in Wimax the government has decided to sell only three slots of spectrum in the first phase.

Raja also clarified that both MTNL (Delhi and Mumbai) and BSNL (rest of India) would have to match the price of 3G spectrum bid by the other four players.

The issue of 3G has been hanging fire as the Department of Telecom and the Finance Ministry failed to arrive at a consensus over the base price for autioning the third generation radio waves.

The decision come as a relief to operators who have been getting their networks ready for offering the 3G services.

In his Budget for 2009-10, Mukherjee had estimated to raise Rs 35,000 crore from auction of spectrum, both 3G and 2G in future allocations.

The meeting was also attended by other members of the eGoM, including Cabinet Ministers P Chidambaram, Sharad Pawar, Ambika Soni and Planning Commission Deputy Chairman Montek Singh Ahluwalia.