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India to auction 3G licences this year; foreign bidders allowed

04 августа 2008

Shares in India's telecoms providers received a boost Friday when the government announced its long-awaited plans to auction 60 MHz of 3G spectrum this year.

In a statement the Department of Telecommunications (DoT) said the auction will be open to anyone holding a Unified Access Service Licence (UASL), or who meets the government's previously published criteria for obtaining one.

This means that India's 3G market will be open to new entrants, including foreign players, one of the many hotly contested issues that caused the auction guidelines to be delayed. 

The government aims to begin the auction process in around two months, and complete it by December, communications minister Andimuthu Raja told a New Dehli press conference, according to Bloomberg.

Meanwhile India's Fresh News added that initially there will be licences available for five players, but this could rise to 10, depending on spectrum availability.

The auction itself will be conducted in two phases due to delays by the country's defence forces in freeing up some of the required airwaves.

"Spectrum shall be auctioned in blocks of 2 x 5 MHz in [the] 2.1 GHz band. The number of blocks to be auctioned may vary from five to 10, subject to availability in different telecom service areas," said the DoT's guidelines.

The ministry said the actual number of blocks going under the hammer in each region will be announced "well before the auction", and that each successful bidder will be allocated only one block per service area.

India's telecoms circles are divided into three categories, A, B, and C, each with a reserve price of 1.60 billion rupees (€24 million), 800 million rupees (€12 million) and 30 million rupees (€4.5 million) respectively.

As such, the base price for an all-India 3G licence stands at 20.2 billion rupees (€300 million), Reuters quoted Raja as saying. The minister added that he expects bids to reach 300 billion-400 billion rupees (€4.5 billion-€6 billion).

The DoT said the country's state-run operators MTNL and BSNL will automatically be allocated spectrum, but will have to pay a cost equal to the highest bid in each respective service area.

"The successful bidder shall get spectrum allotment for 3G services for a period of 20 years," added the ministry.

Operators allocated bandwidth will be obliged to provide 90% coverage in metropolitan areas within five years of being awarded the spectrum, otherwise they will be forced to pay a penalty equal to 2.5% of their final bid.

The DoT said the licence will be withdrawn if its requirements are then not met within one year.

Separately, the DoT also published its rules for companies wishing to operate mobile number portability (MNP) services in India.

The government said it has divided the country's 22 telecom circles equally to create two MNP zones, with one company responsible for implementing MNP systems in each zone.

Mobile number portability services allow customers to switch providers taking their phone number with them.

"One company can bid for both the zones. However, only one MNP licence shall be issued to any eligible and successful bidder company in either of the MNP zones," said a DoT statement.

Источник: Total Telecom

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