Government eyes Rs 48k crore from 3G auction

 NEW DELHI: The government wants to auction 3G spectrum soon and the department of telecom (DoT) has taken forward its talks with the defence ministry for freeing up spectrum in the 2,100 MHz band, communications minister Kapil Sibal has said. "We are trying to sort out the matter," Sibal told TOI when asked whether DoT is talking to the defence ministry for vacating the third-generation spectrum. "Let us hope that the issue is sorted out soon."

Sale of the lucrative 3G airwaves will come as a boon for the cash-strapped government, which is battling the twin headaches - fiscal and current account deficits. An internal note of the finance ministry has estimated that vacation of 3G spectrum by the defence will open up additional 2x20Mhz of the higher frequency spectrum and help the government mop up about $8 billion (around Rs 48,000 crore) through the auction of four slots. The calculation assumes a 50% discount to the last auction prices in view of the "prevailing market conditions".

Sibal said the government wants to see 3G spectrum sale, though this may not be possible with the upcoming 2G auctions slated for January. "What we want is to auction all spectrum that we have," the minister said.

As per the finance ministry's note, the potential collections from 3G sale will fetch higher revenues than what is estimated from the overall auctions in the 900 MHz and 1,800 MHz bands (2G auctions). The note suggests that the defence forces may be allotted spectrum in the 1,900 MHz band in lieu of the airwaves they vacate in the 3G (2,100 MHz) frequency.

However, industry analysts say that it will be an uphill task to convince the defence forces to vacate 3G spectrum. The defence ministry is unhappy with the fact that there is no progress on laying of a dedicated optical fibre network (OFC) that was promised to it earlier. The DoT was to commission the fibre network for the defence services at a cost of Rs 10,000 crore, and this was to be built by BSNL. This had been promised in lieu of the spectrum the defence forces had vacated earlier.

Telcos are not happy with the situation as the tussle between DoT and defence forces is delaying 3G sale. "We feel that 3G auctions should be held as soon as possible as the industry is starved of spectrum and we do not have the bandwidth to support National Telecom Policy-2012 targets for broadband," said Rajan Mathews, director general of GSM lobby group Cellular Operators Association of India (COAI).

Mathews said the various wings of the government should sort out their differences fast so that 3G auctions can be held within the tenure of the present government.                                                                                                            Love Kumar Gupta                                                                              PGDM 1st Sem