3G Auction – DoT and Finance Minsister Differ

The Finance Ministry wants 3G auctioning in all zones of the country as opposed to DoT’s suggestion of conducting it only in 13 circles. 3G spectrum is unavailable in 9 circles as defense forces are yet to vacate spectrum.

The timing of the 3G auction remains uncertain as the possible high cost for a 3G license could deter several new operators and some of the incumbents from making a competitive bid. Some operators might want the auction process to be delayed though the government is reportedly firm on doing the auction in January 2009.

3G Auction will dig a deep hole into the operators pocket and it will take at least 12-18 months for 3G to start contributing significantly to operator revenues.

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1 thought on “3G Auction – DoT and Finance Minsister Differ

  1. Hongkong 2.5/ 2.3 Auctions -a wake up call for WiMAX auctions in India

    WiMAX despite over 400 networks successfully rolled out is presently being buffeted by strong winds of a pessimism. Sample this- in the 2.5 GHz and 2.3 GHz auctions which were held in Hongkong in Jan 2009 by the OFTA the only bids which came in were for the 2.5 Ghz-2.6 GHz band. There were no bidders for the 2.3 GHz band which is a prime band for mobile WiMAX with WiMAX forum certified products being available. Not only that, the only successful bids in the 2.5-2.6 GHz band the bidders were mobile companies ( China Mobile HK, CSL and Genius Brand) and have not hidden their intention to use the potential spectrum for LTE. This is despite the fact that LTE, a technology evolution path of 3GPP is still at least 2-3 years away.

    As India enters the auctions of 3G and WiMAX portions of spectrum later in march / April 2009, the results of auctions should be a wake up call. We have been pointing out repeatedly that while the air interfaces can be used for WiMAX, the companies are planning to use the LTE based technologies.

    With the Indian govt and regulators having adopting an Ostrich like attitude believing that the WiMAX spectrum in the 2.3 and 2.5 Ghz bands would be used for growth of broadband wireless in the country, the reality will bite when the auctions are over with a probable repeat of the Hongkong results. The reserve prices of WiMAX spectrum fixed at 50% of 3G prices ( at appox $800 million for 3G and $400 million for WiMAX) making it well out of reach of broadband wireless operators. The only users which could possibly use this new spectrum in the 2.5 GHz bands are likely to be those using 3G-LTE technology. This is owing to the sever spectrum crunch for 2G services and the need to deploy additional spectrum for voice services by a multiplicity of players which makes any possible additional capacity attractive.

    hence the policy makers should be under no illusion that just because they are auctioning certain spectrum as WiMAX, it will be used for anything other than LTE. But perhaps they are indeed aware of it. After all the 2.5 GHz band has been vacated by throwing to the wolves the existing WiMAX operators operating in this very band.

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