The Hindu Business Line : 3G services launch by early next year likely

The Communications and IT Minister, Mr A. Raja, on Friday said that the final guidelines for 3G (third generation) mobile services will be announced by June after consulting the Law Ministry and the Prime Minister. While the Law Ministry’s help has been sought to finalise the modalities of auctioning spectrum, Mr Raja will meet the Prime Minister to take a decision on whether to restrict the auction to existing licensed operators.

Once the policy is finalised, the operators who win the auction will take at least six months to roll out the facility that promises to improve quality of mobile services apart from enabling high speed Internet access on handsets.

Speaking at the Global Telecom Summit organised by Assocham, Mr Raja said that his Ministry was currently engaged in preparing detailed guidelines that would lay out a time schedule for execution of 3G technologies under the UPA Government’s regime. While the telecom regulator had given its recommendation on introducing 3G services in 2006, the Government has been pushing back the date for launching the services because of differences between various departments on policy related issues. One such issue is that of allowing foreign players to participate in the 3G auction.

While DoT is in favour of allowing new and foreign players to bid for spectrum, the telecom regulator suggested that it be restricted to existing licence holders on the grounds that they would be better positioned to roll out 3G services. Mr Raja said that he will be discussing the issue with the Prime Minister. He said that in any case foreign players can pick up to 74 per cent stake in any Indian telecom company and participate in 3G auction. A decision either way will have major ramifications on the valuations of the telecom companies.

If the bidding is kept open, some of the new Indian licence holders may not get a high valuation as foreign players such as AT&T will have other options to enter the fray. However, if the bids are restricted the foreign players will be forced to pick up stake at a higher price in one of the new licence holders such as Datacom or Unitech.

The other point of debate is whether operators should be given 5 Mhz spectrum or 10 Mhz. While 5 Mhz bandwidth is enough for an existing mobile player like Airtel, for a totally new operator this may be less as it will have to pack both voice and data in that spectrum. Launch of 3G services has also been delayed due to lack of spectrum as the defence forces are yet to release it. A Group of Minister was constituted to resolve this issue but even after a year, there is no clear visibility of how much spectrum will be made available for 3G services.