The ministry of communications in a bid to fasten things on 3G front may hike the reserve auction price for pan-India 3G spectrum. This recommendation is currently mooted by DoT and would soon be forwarded to cabinet ministry.
Till date current 3G policy envises reserved price to be set at Rs 2,020 crore and accommodation of five players per circle. The new price is being pegged at Rs 3,540 crore by DoT also looking at earlier pricing of a minimum Rs 4,040 crores by the finance ministry. This may further wash down the expectation of cheaper 3G services in India.
The department would also earn significant revenues by increasing total number of 3G players from the current five to about seven to eight players per circle. This would indeed fulfill government revenue target of Rs 40,000 crore from these auctions alone and avoid any fresh wave of troubles from finance ministry.
The hike in prices is also due to the opposition which telecom minister A.Raja earlier faced owing to cheap auctioning of new telecom licenses. The government is also of the view that hike in 3G auction prices may fasten the auctioning process of 3G spectrum without any major opposition. The government is planning to take up the proposal for the auction of 3G Spectrum for mobile services within the next two weeks
The move is mainly aimed to capture strong growth witnessed by telecom players in days of economic turmoil and their ability to raise significant cash. The major argument about 3G pricing was started a long time ago when Ratan Tata openly admitted to be ready to pay hefty amount for 3G spectrum.
The government has been delaying availability of 3G on a wide basis for quite a long time now and needs to look beyond revenue implications of few thousands crores. 3G would provide next wave of growth to telecom sector and most importantly supplement the needs of growing telecom subscribers.
