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Finance ministry to look into 3G slot matter

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Press Trust Of India New Delhi

The telecom ministry has referred the matter of number of 3G spectrum slots in each circle to the finance ministry for a wider view.

Sources said Telecommunications Minister A Raja wants to consult the Ministry of Finance before taking a decision on the number of 3G slots for each circle. The response of the finance ministry is expected shortly.

The reserve price for pan-Indian 3G auctions would be Rs 2,020 crore. BSNL and MTNL, the state-run companies, have already been given a slot each in Chennai and Delhi, respectively. According to the guidelines, in each circle five operators would be allotted 3G spectrum and five more operators are expected to be allotted the spectrum on a later date.

 

Currently, 60 Mhz of the 3G spectrum is available. Off late there are indications from the Department of Telecommunications (DoT) that the number of players could be restricted up to five per circle, including BSNL and MTNL. This leaves out three private players in a circles.

If this happens, it would be a drift from a decision announced by Raja in August, which allows five to 10 operators per circle or service area for 3G services, which will enable faster data downloads via mobile phones. The operators fear of high bidding price for lesser number of slots. The Telecom Regulatory Authority of India (Trai) had suggested that five 3G licences of 5 Mhz each be given through the auctioning route.

Consumers may also lose out on quality of service due to restricted competition and the exorbitant bidding price (in case of less number of players), which may reflect in high retail prices for them.

Industry sources said that the government has not enough radio waves at its disposal and hence it can give no more than four 3G licences, including BSNL and MTNL, in any of the 22 telecom circles.

At present, there are 11 to 12 mobile operators per circle in the country. If there will be few slots up for bidding, the bids are bound to be high, an operator said.

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First Published: Dec 10 2008 | 12:00 AM IST

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