3G auction now hopefully on April 9

After several postponements and indecisiveness over the availability of spectrum and, therefore, the number of slots to be placed for auction, the government has identified April 9 as the latest date for 3G auctions. According to the latest schedule, the notice inviting applications will be issued on February 25 (Thursday) with March 19 given as the last date for submitting applications. On March 26, the ownership details of applicants will be published and mock auctions will be held on April 5 and 6. The auction of Broadband Wireless Access (BWA) spectrum will begin two days after the close of the 3G auctions. Given the frequent back and forth on the dates, it is unlikely that India will see any surprise participation in the auctions. At best, usual suspects like Bharti, Vodafone and the Tatas are likely to be the frontrunners for bagging substantial spectrum, followed by companies like Idea, Reliance and Aircel. Some of the new entrants like Telenor may also bid but their bids could be circle-specific rather than pan-India bids. The estimate of revenue recovery from 3G has varied between Rs 40,000 crore and Rs 30,000 crore over the last year. More than a year ago, telecom minister A Raja had announced that 3G auctions would fetch Rs 40,000 crore for the exchequer. The auctions were subsequently cancelled and postponed indefinitely in January 2009. The revised revenue estimates are closer to Rs 30,000 crore subject to the availability of four slots. So, the current estimates run at roughly Rs 6,000 to 7,000 crore per pan-India slot of 3G spectrum in the 2.1 GHz band. While several reasons have been cited for the postponement of 3G auctions, ranging from Christmas holidays in 2008 to lack of interest by bidders and even the economic downturn of 2009, the real and tangible reason for the delay has been the non-availability of sufficient spectrum, which can be readily be placed for auction. The embarrassment caused due to constant disagreements between the DoT and defence ministries on this issue is the legacy of the UPA in its first innings. This continued in the UPA government’s second innings, resulting in postponement of auctions of 3G spectrum even from January 2010.