3G roll-out set to hit roadblock

[icar]

It is now a group of ministers which will take a call on whether foreign and domestic Companies can participate in the auction for 3G spectrum. The attorney general of India, who was asked by the government to sort out the issue, has made this recommendation. This means the roll-out of 3G services may not happen during the UPA government’s remaining term. Bids can only be invited after the ministers’ group takes a decision. Given the timeline usually required by Companies to roll out the services, which is a minimum of seven to eight months, 3G is unlikely to happen in the immediate future.
Minister for communication and IT A Raja had recently said the roll-out would be completed by January 2009.
The latest twist in the 3G auction business follows the difference between the department of telecommunication and the Telecom Regulatory Authority of India. The department, supported by the finance ministry, favours the inclusion of new players in the auction, but the regulator wants no new participants in order to avoid complications. The DoT had asked the Attorney General to decide whether foreign and new domestic players be allowed to participate in the 3G auction.
As reported by FE earlier, there were technical constraints in allowing new players to participate in the auction of the 3G services. Allowing new foreign players, for instance, would entail granting of a unified access service licence (UASL) to them for 3G services. If the licence is provided, the government will find it impossible to stop them from competing with the existing 2G service providers in the country, except through an amendment of the licence terms, which could be challenged in a court.
The DoT and the finance ministry had felt that more players be allowed as that would generate more revenue for the government for a resource so scarce.
But Trai had been of the view that, since the existing Companies already had the requisite infrastructure in place, there were enough players to bid competitively for the scarce resource. It also felt that allowing new players would needlessly delay the roll-out of 3G.

3G roll-out set to hit roadblock

 

[Motorazor143]

its been ages since these guys r working on this 3G, when will they release 3G in India when other countries would start 10G

 

[icar]

The ongoing controversy over the entry of foreign communication majors and new domestic players into India’s telecom market via the 3G spectrum auction route has taken a new twist. ET has learnt that the Attorney General of India, to whom DoT had referred the matter, favours setting up of a Group of Ministers (GoM) to resolve this issue. However, ET could not verify this with the Attorney General’s office.

If the communications ministry were to refer this issue to a GoM, it would be the second time that a telecom issue has been referred to GoM under the UPA regime.

In September 2005, following directions from prime minister Manmohan Singh, a GoM headed by the external affairs minister Pranab Mukherjee was constituted to look into the issue of additional frequency from defence services. So far, this GoM has met only once.

The DoT and communications minister A Raja are keen to open the 3G auction process to all players against the wishes of sector regulator Trai who wants only existing players to participate. Confronted with stiff opposition from Trai, the DoT had referred the issue to the AG. This was to avoid legal complications, as the department had wanted the AG to clarify whether foreign companies which do not hold telecom licenses in India can be allowed to bid for 3G.

The finance ministry too has supported the DoT and wants new foreign companies to participate in the 3G auctions. Despite DoT asking Trai to reconsider its stand against allowing international majors, the regulator has refused to budge.

Going a step further, Trai chairman Nripendra Misra has written to the finance ministry to drop its demand for a global auction. Mr Raja had met Mr Chidambaram on this issue last week and said that there was a ‘broad consensus between both ministries on 3G’, implying that foreign players would be allowed.
AG may refer foreign role in 3G to GoM - Telecom-News By Industry-News-The Economic Times

 

[rachit_1804]

:wall::wall::wall:

 

[icar]

In A bid to resolve the imbroglio over 3G spectrum auction, DoT has sent a note to the Prime Minister’s Office (PMO), detailing the issues in the auction process that could bring billions of dollars to the country’s treasury.
While the PMO is studying the note, sources said India may allow foreign players to participate in the auction. “The PMO is backing finance ministry’s proposal to allow foreign operators to bid for 3G spectrum,” sources told ET.

“Global bidding will bring in more money. It will enable the government to raise resources for various programmes such as National Rural Employment Guarantee Programme (NREGP), Bharat Nirman Yojana besides for subsidies on fertilisers, food and fuel,” sources said.

As per telecom regulator TRAI’s recommendations, the base price for auctioning would be around Rs 1,400 crore for a country-wide licence. However, it could be billions of dollars in the case of International competitive bidding (ICB).

In 2001, the UK raised over $25 billion though auction of 3G licences, an amount which was the UK government’s half-year income tax revenues then. 3G services include video calls, high-speed internet browsing, video streaming and movie downloads besides others. DoT has sought the PMO’s advice on whether 3G auctions should be done only among existing licensees or should also include new Indian operators and foreign services providers.

DoT also apprised the PMO with the possibilities of telecom operators going to court over various issues. “ICB requires certain eligibility conditions, which would include experience of providing mobile services. Some existing 2G licensees don’t have this experience as this is not a criteria for giving licences. They may go to court and delay the process,” DoT told the PMO.
Further, if a non-licence holder gets 3G spectrum on the basis of auction, it will have to be given a licence. There are already 342 applications pending for approval and these applicants may also go to court, said the note.

TRAI, however, feels that there are enough existing players to ensure competition for raising revenues. Also, allotment of five blocks will not be sufficient for new players to roll-out 3G services.

India will auction five blocks of 5Mhz in each circle. Each participant can take only one block. Analysts believe that efficient 3G services require a minimum of 10Mhz spectrum or the prior existence of 2G networks, which are only with existing operators.

A global auction of 3G spectrum is necessary for various reasons. “One, it will lead to price discovery of a scarce resource. Secondly, it will weed out non-serious and financially weak players. Most importantly, it will raise the much needed revenues for the Government. Besides, it will also strengthen India’s image as an economy following market principles,” an analyst told ET.

According to IIM-A telecom centre of excellence executive chair Dr Rekha Jain, “If foreign operators are allowed to come, there will be greater competition. Prices of bids will go up as these players have huge pockets.”

“However, the inflow also depends on the way the auction is designed. In a single-round option, bids will be much higher. In case of multiple rounds, bids can be increased at every subsequent level,” she said.

 

[icar]

Raja's 3G foreign push hits DoT roadblock
Even as communications minister A Raja has gone public several times over his intentions to let foreign players bid in the upcoming 3G auctions, serious differences appear to have cropped up within department of telecom (DoT) over this issue.

DoT has prepared a note for prime minister listing out the advantages of limiting the upcoming 3G auctions to existing players. The note also lists several disadvantages of allowing foreign players in via an international competitive bidding as suggested by the finance ministry and Mr Raja.

Incidentally, the DoT note to the PM comes even as Mr Raja and finance minister P Chidambaram are slated to meet Mr Manmohan Singh to press their case for a global 3G auction. It is also learnt that the DoT had a high-level meeting with telecom regulator TRAI, who has bitterly opposed the entry of new players, before preparing the note for the PM.

ET has learnt that the primary reason for a section of DoT supporting TRAI and not Mr Raja on 3G is on account of the upcoming probe by the Central Vigilance Commission.

Sources confirmed that the CVC will soon open a probe against the communications ministry on three grounds, the DoT’s move earlier this year to award licences for Rs 1,651 crore, a fee fixed in 2001, for failing to follow TRAI’s recommendations of 2003 that future allocation of 2G spectrum should be via an auction process and also over the DoT’s move to allot start-up 2G spectrum to dual-technology licence holders such as Reliance Communications, ahead of other applicants in the queue for radio frequencies. “Against the background, a significant section does not favor Raja,” a source added.

What complicates the matter even further is that amidst all these developments, another section of the DoT known as the Wireless Planning and Coordination Wing (WPC), has come out with the draft recommendations for 3G policy, which states that all players, international majors, new domestic entrants and even non-licence holders be allowed to bid.

The WPC, in its draft policy, has proposed a base price of Rs 160 crore for metros and category A circles, Rs 80 crore for category B and Rs 30 crore for category C circles.

However, the new DoT note to the PM complicates issues further for Mr Raja. This is because, the note lists four advantages for allowing only existing licensees to bid, current players can ensure enough competition, roll-out will be faster as existing players can provide services in 6-8 months while the time period is likely to be 2-3 years for new players, rollout of exclusive 3G networks by new players will be expensive and will result in higher tariffs and 5 MHz of spectrum will not be sufficient for new players for their 3G network rollout.

At the same time, it also says that if an international competitive bidding as suggested by the finance ministry is adopted, since there were already 342 applicants who are waiting for licenses and 2G spectrum, and these players my go to court and delay the process.

Besides, it also points out that telecom regulator TRAI in its recommendations had said that only existing license holders be allowed to bid, while adding, “Many developing countries have been allotted 3G spectrum to existing 2G licence holders. In UK, the 3G auctions in 2001 got large revenues but the rollout was delayed for several years.\"

The DoT note to the PM comes immediately after yet another communication from TRAI chairman Nripendra Misra. TRAI in its latest communication to DoT secretary Siddharth Behura dated May 24, has listed out six legal complications over allowing foreign players to bid for 3G spectrum.
Raja's 3G foreign push hits DoT roadblock- Telecom-News By Industry-News-The Economic Times

 

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[icar]

Raja to meet PM to resolve DoT-TRAI 3G standoff
Notwithstanding the opposition faced from the telecom watchdog TRAI, the government is understood to have decided to go ahead with the global auctioning of 3G spectrum, a move that will allow foreign communication majors to offer services in the country. The Department of Telecommunication will go for an international competitive bid for allocating 3G spectrum, sources close to the development said adding that the final guidelines for the services as well as for auctioning of spectrum would be announced soon.
Communication and IT Minister A Raja is scheduled to meet Prime Minister Manmohan Singh this week and a final decision in this regard will be taken after that.
Sources also said that government may go for international competitive bidding to earn higher revenues by way of auction in view of government's obligation to meet the debt waiver targets of whopping over Rs 70,000 crore.
The Finance Ministry had also favoured the decision to go for an open global auction, despite telecom regulator TRAI and existing operators being bitterly opposed to the move.
A 3G mobile phone service allows high speed data connectivity enabling services such as live video, Internet surfing, email and other data-heavy applications on a mobile phone. India, the worlds second largest mobile phone services market behind China in terms of customers.
Many global firms have already expressed interest in entering the Indian market and the 3G auction could be an opportunity for them to sell such services to customers.
The government is planning to start 3G telecom services, which enables faster data connectivity as well as efficient utilisation of scarce spectrum by January next year.
Raja to meet PM to resolve DoT-TRAI 3G standoff

 

[icar]

Govt to announce 3G policy after vote of confidence

Government is understood to have decided to announce the guidelines and final policy for third generation mobile services only after proving its majority in Lok Sabha on July 22.

According to official sources, the policy has been finalised and even telecom regulator TRAI has also endorsed Department of Telecom's view to increase the reserve price for 3G spectrum (radio frequency).

TRAI sent back the recommendation on July 14 and Telecom Commission is scheduled to meet on July 18 to consider the 3G policy but it would be announced only after winning the trust vote in Lok Sabha, they said.

DoT had earlier said that foreign players would be allowed to participate in the auctioning process for spectrum for 3G mobile services and if they succeed they would be issued fresh licenses to offer the services.

TRAI had earlier opposed the move to allow foreign players but reconsidered DoT's suggestion and approved it.

Government is estimating to garner about Rs 40,000 crore from the auctioning of spectrum for 3G mobile services and as per the proposed guidelines each player can bid for two blocks of 5 MHz of spectrum in designated band.

Agreeing to DoT's proposal on doubling the reserve price of 3G spectrum for a pan-India license, TRAI has suggested a higher price for the same based on a fresh calculation
Govt to announce 3G policy after vote of confidence- Policy-Economy-News-The Economic Times

 

[rachit_1804]

well not a big block but just a week (if the govt survives)otherwise a very huge delay if a new govt is to be formed

 

[Sushubh]

i expect the government to survive. this government must have the weakest opposition in a long time.