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Update: India’s 3G Auction: Expect Three Operators; Launch Only After September

Update: Delayed again? I’m tired of using the word tiresome, so I’ll let Monty Python share this simple, succinct message for the Indian government:

Earlier (Feb 26th): The 3G Auction notice announced yesterday paints an abstract picture of the future: for some reason, the government has indicated that metros Delhi, Mumbai, Class A circles such as Andhra Pradesh, Gujarat, Karnataka, Tamil Nadu and Maharashtra shall get only three 3G operators while selected Class B and C circles such as Punjab, West Bengal, Himachal Pradesh, Bihar and Jammu and Kashmir get four. Is this move to protect government owned telcos BSNL and MTNL? MTNL only operates in Delhi and Mumbai; both the telcos registered unexpectedly low 3G subscribers. In the first four months of BSNL launching 3G, it only registered 13,000 subscribers. MTNL too had to reduce rates for 3G after a poor start in the capital. Do read our post  MTNL Brings 3G Jadoo To Mumbai; Killer App; 3G A Revolution?

Spectrum auctioning for wireless broadband (BWA) is much neater – a consistent 2 operators per circle will be permitted.

Set to begin on April 9th, the auction of 3G spectrum in India will be preceded by a mock auction. For the timetable of events, read our earlier post. The spectrum under the hammer will be:

  • 3G: 2.1GHz, paired up in blocks of 5MHz
  • BWA: 2.3GHz, in blocks of 20MHz

Download: 3G & BWA Auction Notice Inviting Applications (PDF)

Two Stages: Clock & Frequency Identification

In the Clock stage, spectrum will be allocated simultaneously to the winning bidders of a spectrum block in each service area. Each operator can win only one block per service area.

In the Frequency Identification stage, frequencies will be automatically and randomly allocated by the Electronic Auction System to the winning bidders.

The outcomes of both stages will be announced simultaneously. BSNL and MTNL, who rolled out 3G services almost a year ago now, will have to match the Winning Bid amounts for the 3G spectrum as fees.

Foreign Operators Welcome

The notice states that interested foreign entities will be permitted to participate in the auctions. They may obtain a licence subsequently, either through application for a new licence or through an acquisition of an existing licensee, which will be subject to the country’s M&A guidelines. The government unhesitatingly reveals that this may take “considerable time”.

The notice also has roll out obligations for operators; a fine of 2.5% of the spectrum auction price will be charged if these are not met.

Spectrum Usage Charges

The government intends to collect a percentage of their Adjusted Gross Revenue from the successful bidders every quarterly ranging from 3-8 percent. For BWA bidders, this is only 1 percent.

Is India set for 3G? While the DoT has attempted to ensure that critical infrastructure and competitive factors to ensure uptake of 3G are ensured, users will still need a whole new range of 3G handsets and applications.


India’s 3G Auction On 9th April 2010; Here We Go Again
Bharti Airtel’s CEO & JMD Manoj Kohli On 2G, Price Cuts, LTE, M&A, Rural Content
Editorial: How Telecom Operators In India Should Approach 3G

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