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DoT willing to increase 3G bid price pan-India |
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The department of telecom in India is ready to tell the Union Cabinet that it is open to increase the reserve price for the auctions of pan-India third generation (3G) spectrum to Rs 3,540 crore and auction up to eight slots of 3G spectrum.
According to the existing 3G policy introduced by the communications ministry late last year, the reserve price for pan-India 3G spectrum is Rs 2,020 crore and accommodating five players per circle.
The department of telecom opines that hiking the reserve price for these airwaves will make sure that the finance ministry does not put up any fresh roadblocks for the upcoming 3G auctions, which is vital for high-end services such as video conferencing and high speed internet on mobile handsets. Spectrum is the airwaves on which telecom signals travel and is the lifeline for all telcos.
This comes as the Union Cabinet is set to consider the proposal for the auction of radio bandwidth for third-generation (3G) mobile services within the next two weeks, rather than routing it through a group of ministers (GoM), fast-tracking the much-delayed process.
The DoT will also ask the Cabinet that the total number of players who will be allotted 3G spectrum can be increased from the current five to about seven to eight per circle. The move is targeted to address the concerns of the finance ministry, which fears that a lower base price would result in the government failing to meet its targets of raising about Rs 40,000 crore for these auctions.
Increasing the number of slots will increase revenues from the auctions as this will help more Indian operators and also players from abroad to bag these airwaves.
The DoT in its note to the Cabinet will also inform that even as it is open to hiking the reserve price, it prefers to retain the base price at 2,020 crore as specified under the existing 3G policy.
The DoT`s logic behind the Rs 3,540 crore figure is that it is between the Rs 2,020 crore suggested by the DoT and the Rs 4,040 crore demanded by the finance Ministry. The DoT has arrived at this figure (Rs 3,540 crore) by doubling the reserve price for Delhi, Mumbai and category A circles and increasing it 1.5 times for Kolkata and category B circles retaining the current base price for category C circles, according to a top executive in the communications ministry.
(Posted on : 17/06/2009)
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| DoT willing to increase 3G bid price pan-India |
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