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Military delays India 3G auction
26 October 2009
Delays by the military mean India has reduced the amount of 3G spectrum that it plans to auction, and has put back the auction date by six weeks — and no auctions will be held at all in two of the country’s 22 regions.
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The delay is because the Department of Telecommunications has failed to persuade the country’s Ministry of Defence to release parts of the spectrum that is up for auction before June 2010. The spectrum should have been cleared by September.
That means the process will be split into at least two stages, with spectrum that is now available being auctioned in January 2010, with the rest following as soon as the Ministry of Defence can be persuaded to give up its frequencies.
The reduced spectrum will delay the achievement of the government’s target of using 3G to increase broadband penetration across the country. It will also hit the Treasury’s plan to raise 250 billion rupees ($5 billion) directly from licence fees.
The auction will now start on January 14 2010, several weeks after the previous date given by the Department of Telecommunications, December 7 — though that itself was much later than originally expected: it was once expected in 2007 even in August 2009 the department was aiming for November.
Because state-owned operators BSNL and MTNL have been guaranteed 3G frequencies, there will be only two or three blocks left in some regions, compared with five originally planned. Two districts, the North-East and Rajasthan, will have none available for auction.
And in some, the government will have to come back to re-auction capacity some months — or longer — after the original auction, giving bidders in the first stage no visibility of the extent of the interest.
It’s not the first time governments have had problems with military and security services occupying the 3G spectrum. Before the UK auctioned its 3G licences in March 2000, an official survey showed a number of unlicensed users on the frequencies — including some believed to be close to the MI5 security service. Quiet words in the corridors of power were needed before UK operators were able to buy clear spectrum. GTB