The much awaited auction of spectrum for 3G mobile services is likely to be delayed by more than a month and may commence from the first week of March next year-- schedule for which is to be announced soon.
The auction process may start in last week of February or the first week of March, a senior government official said, adding the revised schedule is being worked out taking into account the outcome of last meeting of an Empowered Group of Ministers where defence ministry agreed to vacate spectrum.
Last week, Telecom Minister A Raja had said that auction would be as per schedule (January 14, 2010) but it seems impossible as the Department of Telecom (DoT) is yet to finalise details of Notice Inviting Applications (NIA).
According to officials, it would take at least 5 weeks after that to start the auction process. In view of year-end and Christmas holidays, NIAs may be issued some time in the middle of January next year.
The government has estimated to generate over Rs 25,000 crore (Rs 250 billion) from the sale of 3G spectrum. The government has fixed the reserve price of Rs 3,500 crore (Rs 35 billion) for pan-Indian spectrum.
Despite crunch of spectrum, the government has decided to auction four slots, besides the one each already given to two telecom PSUs -- BSNL and MTNL.
Earlier, the DoT had expressed concern over delay in vacation of spectrum by the Defence Ministry and had suggested, in its note for eGoM meeting, that only three slots should be auctioned.
The government has, however, decided that spectrum would be allocated simultaneously in August 2010 to all the winners in order to maintain a level-playing field.
Asked how much spectrum was currently available with the DoT, the officials declined to give details.
The DoT is also building an alternate optic fibre network for the defence forces at a cost of over Rs 9,500 crore (Rs 95 billion) enabling the defence to vacate spectrum for commercial use.
On the issue that whether the winners of 3G bids would be asked to pay the entire money upfront or at a time of allotment of spectrum, the officials said all these details would be announced soon after due deliberations.
It would be crucial as Finance Minister Pranab Mukherjee had made a provision of over Rs 35,000 crore (Rs 30 billion) from sale of spectrum in the current financial year.
The revised schedule is expected to be announced by the middle of next month, they added.
