The Department of Telecommunications (DoT) has again put the onus of deciding the number of slots to be auctioned for 3G spectrum on Finance Minister Pranab Mukherjee.
This comes in the wake of a clear divide between DoT and the defence ministry on vacating spectrum currently for the auction process, which was scheduled to start from January 14.
DoT wants to auction four slots for private players as decided at a meeting of an Empowered Group of Ministers (EGoM), headed by Mukherjee, on December 21. But the defence ministry says the spectrum would be available for three slots only. Due to these differences, the auction is likely to be delayed by over a month.
DoT was expected to release notice inviting applications (NIA) on December 8, but it has been unable to do so because of uncertainty over vacation of spectrum by defence forces.
The spectrum for all the four slots would be available by August 2010, so the allotment would be done simultaneously. DoT has already allotted one block of 3G each to state-run telecom players MTNL and BSNL.
Amid differences between the two ministries on the number of slots, the telecom secretary has suggested that DoT would seek the advice of the finance minister through Communications and IT Minister A Raja on the exact import of the decision of EGoM, according to a decision taken by an inter-ministerial committee chaired by Cabinet Secretary KM Chandrasekhar. The panel was set up recently to expedite the auction process.
According to a memorandum of understanding signed between DoT and the defence ministry, 20 MHz would be released immediately, while 5 MHz would be vacated only after setting up an optical fibre network at a cost of Rs 9,175 crore.
The government has fixed a revenue target of Rs 25,000 crore from the auction of 3G spectrum. It has also fixed a reserve price of Rs 3,500 crore for 3G spectrum and Rs 1,750 crore for Wimax (wireless broadband) services.
There is also no consensus on the timeline of payment for 3G auctions between the finance and communication ministries. While the finance ministry insists on an immediate full payment by the winning bidders, DoT wants the winners to make only part payment and the remaining amount at the time of allotment of the spectrum.
