India's 3G licence auction sees stellar price rise

May 08, 2010
An Indian woman speaks on a cellullar telephone in Allahabad, India. Bids for nationwide licences in India's sale of spectrum for superfast 3G mobile services have hit 2.65 billion dollars, a government website said Saturday.

Bids for nationwide licences in India's sale of spectrum for superfast 3G mobile services have hit 2.65 billion dollars, a government website said Saturday.

An offer of 120.69 billion rupees (2.65 billion) reached on Friday was nearly 3.5 times the 35 billion rupee reserve price set by the for a pan-India slot.

Final figures weren't available for Saturday but bidding was expected to kick off at 122.52 billion rupees.

Nine cellular firms, including Indian market leaders Bharti Airtel and Reliance Communications, are competing for 3G airwaves in the country, which added a record 20.31 million subscribers last month.

Proceeds from the auction, which began April 9, will be an important source of revenue as the government seeks to plug a yawning budget deficit.

Telecom Minister A. Raja has said the government is likely to earn upwards of 500 billion rupees from the auction of 3G spectrum and a follow-on sale of broadband airwaves.

Analysts believe the auction could be heading into its final stretch and could conclude in the coming days.

The sale, in which phone operators are slugging it out for scarce spectrum space in the world's fastest-growing mobile market, is seen as propelling decisively into the Internet era.

There are nearly half a billion mobile phone subscribers in India, only a fraction of whom have access to the Internet via computers. New 3G networks will give people fast access to the web from their handsets.

Analysts say the cost of 3G could strain the balance sheets of India's telecom companies, which are already under pressure from a savage in the congested mobile market.

"There is not going to be any quick payback," KPMG telecoms analyst Roman Shetty told AFP, predicting companies would only start earning money from their 3G investments after four-five years, after consolidation of the overcrowded Indian market.

The high sums being raised have also focused attention on a government move two years ago to award 2G licenses on a "first-come, first-serves" basis, rather than by auction. The Telecom Regulatory Authority of India was overruled when it proposed an auction.

Opposition parties have called for the resignation of communications minister A. Raja, alleging corruption in the distribution of 2G licences.

Some telecom ministry officials and private companies are already being probed by India's Central Bureau of Investigation.

Last year they raided offices to pursue allegations of irregularities in the awarding of the licences.

Explore further: Net expansion driven by mobile presents risks and opportunities for marketers

add to favorites email to friend print save as pdf

Related Stories

India says will start 3G auction in January

Oct 25, 2009

India said Saturday a long-delayed auction of radio bandwidth for third generation (3G) telecommunications services will start in January and will be open to foreign companies.

India's billion-dollar 3G auction set to open

Apr 08, 2010

In an auction set to open Friday, India's mobile firms will bid billions of dollars to provide superfast third generation (3G) service in the country's booming cellular market.

India 3G auction to be held on schedule: minister

Dec 11, 2009

India's long-awaited auction for third generation (3G) mobile telecom services will be held on schedule next month, a minister said Friday, dismissing media speculation of a delay.

India misses deadline for 3G auction

Dec 09, 2009

India's government has missed a deadline for inviting bidders to take part in its long-awaited auction for third generation (3G) mobile telecom services.

India plans 4G mobile sale: report

Apr 14, 2010

India plans to hold an auction of ultra-high-speed fourth-generation (4G) mobile phone spectrum soon after completion of 3G access now underway, a report said Wednesday.

Recommended for you

Google wireless service could disrupt carriers

Jan 27, 2015

Internet users from San Jose to Kansas City have been clamoring for Google to lay down its long-awaited fiber-optic network to compete with Comcast and AT&T in speeding up Web and television access. Now the Silicon Valley ...

Google super-fast US Internet service spreads

Jan 27, 2015

Google's super-fast Internet service—up to 100 times quicker than basic broadband—is heading for four more US metropolitan areas as the technology titan ramps up pressure on cable service giants.

Transmitting wireless data on higher frequencies

Jan 27, 2015

Everything we do that requires a wireless connection uses the radio spectrum. We're able to harness radio waves to listen to music in the car or stream Netflix from the 4G network on our smartphones. Each ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.