India's 3G, Wimax license auctions scheduled for January

India's Department of Telecommunications (DOT) has fixed Jan. 14 as the tentative date for the auction of 3G licenses in the country, according to a notice on its Web site on Saturday.

An auction of licenses for operating broadband wireless services like Wimax will be held two days later, DOT said. The government will also auction on that day spectrum for enhanced CDMA (code division multiple access) services to existing CDMA licensees.

The auction that was initially scheduled to be held in January this year was postponed as the country's finance and communications ministries could not agree on a minimum price for the licenses. After an agreement was reached between the two ministries, the DOT announced that the auction would start on Dec. 7.

The Minister of Communications A. Raja said earlier this month that the auction would definitely be completed before March 31, 2010.

The DOT announced new auction terms on Saturday even as key DOT officials and some private companies are under investigation from the country's Central Bureau of Investigation (CBI) for alleged irregularities in the allocation of 2G licenses. The officials are being investigated for handing out 2G licenses at very low prices to operators on a first-come-first-serve basis, rather than through an auction as was recommended by the country's telecom regulator, the Telecom Regulatory Authority of India (TRAI).

The 3G auction, which is proposed to be an electronic auction over the Internet, will allow foreign bidders. But if they win, foreign bidders will be restricted to owning a maximum of 74 percent of equity in the service providing company.

Investors will have to bid separately for each of the country's 22 service areas.

The government has still to ascertain the availability of spectrum, though it hopes to be able to offer four slots of spectrum in the 2.1 GHz band for 3G in each of the service areas.

A fifth slot is reserved for two government-run telecommunications companies, DOT said.

These companies - Bharat Sanchar Nigam Ltd. and Mahanagar Telephone Nigam Ltd. - were allotted 3G spectrum ahead of the auction, and have started offering services. The government said last year that they would pay license fees equal to the highest bid in each service area.

Two slots will be available for broadband wireless in each service area in the 2.3 GHz band, while one slot will be available for enhanced CDMA in the 800MHz, DOT said.

The government said earlier this year that it plans to raise a minimum of 250 billion Indian rupees (US$5.3 billion) from the auction of 3G and other spectrum.

A telecommunications company bidding for 3G licenses in all 22 circles will have to pay at least 35 billion rupees, according to the new minimum pricing proposed by the Indian government. By the pricing announced last year, they would have to pay about 20 billion rupees.

The IDG News Service is a Network World affiliate.