The country’s promised 3G roll out –after the Department of Telecommunications(DoT) announced the guidelines for the auction and allotment of spectrum for these services received a major jolt with the Ministry of Finance (MoF) charging DOT that it was not consulted in the matter which is inappropriate and contrary to a cabinet decision in this regard.
It has asked DOT to set up consultative meetings with appropriate authorities in the MOF so that requisite approvals are obtained before the policy is finalised.
Communications minister A Raja announced the guidelines of the 3G policy on 1st August announcing that it will auction between five to ten 3G licences across the country.
Raja also issued 3G licence to state owned BSNL and MTNL without waiting for the auction and said that they would roll out their services within six months.
It also fixed the base price for the auction which varied from Rs 30 to Rs 160 depending on the circles. Raja also announced that he hoped to rustle up Rs 40,000 crore from the auctioning for the government.
However the finance ministry objection might delay the 3G auctioning process which was expected to be completed by the end of this year.
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The finance ministry in its communication to DOT has stated that under the Transaction of business rules 1961 it is mandatory for other government departments to consult them in respect to all issues which have financial implications.
The ministry has stated that the DOT guidelines fall in this category as it contains clauses which have financial implications to the Government.
These issues include the method of determining the spectrum acquisition price, fixing of a reserve price for auctioning, spectrum usage charges and penalties for hording of spectrum by operators.
The finance ministry has also stated that Cabinet in a meeting on October 31st 2003 had clearly decided that spectrum pricing would need to be decided mutually between DoT and the MoF so as to provide incentive for efficient use of spectrum as well as disincentive for sub optimal usage.