3G pay dirt
Three spectrum slots of 2.5 megahertz on one side and five national private cellular telcos and many more international telcos on the other. The bids for 3G spectrum in India promise to be interesting—and a windfall for the government of India. When BT went to press, a formal announcement on 3G auctions was expected, but there was already talk of the Department of Telecommunications (DoT) setting a reserve price of Rs 2,260 crore for an all-India 3G licence. Given the intense competition for 3G spectrum, bids are expected to be far higher than the reserve price. In fact, some analysts expect bids to range from Rs 10,000-12,000 crore for each of the three spectrum slots.
However, expect the bidding to be stiff, given that every operator’s future growth depends on additional spectrum, especially for 3G, which will allow higher value data and video services to be offered on cellular phones.
As a late entrant into 3G, India actually has some advantages. For one, operators can skip early 3G systems such as Wideband-CDMA (WCDMA) and go directly to High-Speed Packet Access (HPSA) networks, which are often referred to as 3.5G systems, since they offer higher call throughput and faster download speeds. In fact, according to one network supplier, it might be possible to start a phased rollout of HSPA networks “within months of the auction”.
There are a couple of things that are still unclear about 3G auctions, though. One, whether they will actually take place ahead of the general elections and, two, what happens if bids are invited and then the country gets pitched into general elections. Besides, given that there are more bidders than spectrum available, the losers will almost certainly challenge the auctions in court. Bottom line: 3G remains as tantalising a dream as before.
—Kushan Mitra
