Consensus on reserve price, 3G auction soo

Finally, the long-awaited auctions of 3G spectrum, the airwaves that enable faster data download and video streaming on mobile phones, is poised to take place within two months.

The way for the auctions has been cleared on Tuesday after the finance ministry and the department of telecommunications (DoT) have buried their differences over what should be the minimum reserve price for the auctions. The two have agreed on a reserve price of Rs 3,510 crore, which is higher than Rs 2,020 crore proposed by DoT earlier and lower than Rs 4,040 crore suggested by the finance ministry.

Another significant development is that a 2% administrative charge, proposed by the Telecom Regulatory Authority of India (Trai), on the successful bidders annually has been dropped.

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Foreign investors face hard math on Third Generation entry

Third generation (3G) services, which provides for faster data download and video streaming, would be a tough call for foreign telecom firms as the investment would not make economic sense for them.

The new players would have to invest upwards of Rs 17,000 crore to support a measly customer base of 50 lakh.

Since they would have to provide voice and data on a 2.1 GHz spectrum, the quality of service would also suffer.

Though none of the global telecom firms were willing to come on record, they expressed such concerns off the record to FE.

This is how the numbers work: Any global telecom player with experience in 3G services, if gets the 2.1 GHz spectrum through the auction, would first have to acquire a mandatory universal access service licence (UASL).

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