Note that the 3G auctions aren’t exactly “free and fair” – the government has already blocked spectrum and a license in each service area for public sector telcos– for MTNL in Delhi and Mumbai, and everywhere else for BSNL.

But it appears that BSNL has already been operating 3G services – CyberMedia reports that BSNL is offering EVDO services on a commercial basis, “as a pilot” in select cities. They’ve confirmed that they’re offering 2Mbps via EVDO at Rs. 750 per month, with the EVDO card priced at Rs. 6500. The service is also being offered in Kerala; BSNL is apparently even running a commercial in Bangalore cinema halls for the service. BSNL had earlier said they will roll out 3G in another six months.

Nripendra Mishra, Chairman of TRAI has passed the buck to the Department of Telecommunications (DoT), which is in the unique and not-very-impartial position: of defining government policy, and also as the owner of BSNL. The DoT has confirmed that EVDO falls under 3G, while Kuldeep Goyal, CMD of BSNL claims it is 2.5G. Meanwhile, MTNL has been testing its 3G service in and around Minto Road in Delhi on a non-commercial basis. MTNL is expected to launch 3G services in Delhi in another 4 months. More here and here.

Implications Of This Unfair Advantage

Apart from quality of service, 3G will have little or no impact on the price of voice services. The real difference will be in case of data access. Most other operators are expected to roll out 3G services next year; in fact, the auctions are expected to complete by December. Currently, there are two key players in wireless data access – Reliance Communications, which claims 60 percent of the market, and Tata Communications. BSNLs 3G data services are already operational, and as they roll out services in more Class A towns – particularly Bangalore, Pune, Hyderabad, which have a significant early-adopter user base, you might find RCom and Tata Comm losing ground, because they simply haven’t rolled out the services. BSNL already has quite a head start, but traditionally, their marketing has been lackluster – consumer outreach isn’t exactly their forte.