India Prepares Auction For 3G Mobile Spectrum (TechWeb)
By Marin PerezInformationWeek Mon Aug 4, 3:34 PM ET
The Indian government has paved the way for telecom service providers to offer mobile broadband access, and customers may have 3G networks in as little as six months.
The government announced Friday that they would be holding a global auction for spectrum in the 2.1 Ghz band in about four to five months. The announcement took some time to finalize, as the government reportedly had disagreements on whether foreign companies should be allowed to participate in the bidding.
A Raja, the country's communications and IT minister, said the first auction would probably accommodate up to five players in the first round, and 10 more would be added in the second round as some government and military operations switch to a different communications system.
Each winning bidder will be allotted one block of spectrum in each service area for a period of 20 years. Operators who win the spectrum will be required to provide 90 percent coverage in major metropolitan areas within five years, or risk a penalty, and potentially loss of license.
The government has already allotted 3G spectrum to state-owned telecoms Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited in the areas in which they operate. They will pay a license fee for the spectrum that is equal to the highest bid made in their service area, the government said. The automatic allotment of spectrum license will allow these companies to roll out services quicker, possibly in six months.
India is an extremely fast-growing market that is rapidly adopting mobile phones. Currently, the majority of subscribers use entry-level handsets and services, but the market is quickly maturing to more sophisticated devices capable of utilizing 3G networks.
The market potential has drawn increased interest from handset manufacturers like Nokia and BlackBerry, as well as foreign mobile operators like Vodafone.