Govt issues LoIs to 3G bidders; to allot spectrum on 1st September

Operators are expected to launch their 3G services in the first quarter of next year

The government today said it would allot third generation (3G) spectrum to successful bidders on 1st September, and rejected the criticism of faulty auction process leading to high prices by leading operators, reports PTI.

The government also said that the Broadband Wireless Access (BWA) spectrum would be allocated to all the players, including Infotel Broadband, which has been acquired by Mukesh Ambani-led Reliance Industries (RIL), next week.

"While the overall proceeds from the auction for 3G and BWA spectrum at over Rs1,06,000 crore have exceeded all expectations, an equally important aspect is that the true market value of the spectrum was determined through an efficient and transparent process," telecom secretary P J Thomas told reporters in New Delhi.

The country's largest mobile operator Bharti Airtel, which had won 13 out of 22 3G circles, had criticised the auction process and had said, "We would like to point out that the auction format and severe spectrum shortage, along with ensuing policy uncertainty, drove the prices beyond reasonable levels. As a result, we could not achieve our objective of pan-Indian 3G footprint in this round."

Similarly in case of BWA spectrum auction, the company had pointed out, "A combination of scarcity of slots and the auction format, once again, resulted in extremely high price levels."

Other operators, including Vodafone, had also echoed views and had pulled out of the auction mid way citing irrational bidding.

Anil Ambani group firm Reliance Communications (RCom) and Bharti had won 3G spectrum in 13 circles each along with others. These players would be getting the frequency on 1st September this year and one can expect the third generation mobile services in the first quarter of next year.

Mr Thomas said the revenues earned from sale of spectrum for both 3G and BWA are more than three times the target of Rs35,000 crore, fixed by the ministry of finance in the budget, and more than five times the reserve prices.

On the issue of RIL buying Infotel Broadband, which won BWA spectrum in all India, the government said, "The spectrum cannot be sold but as far as change of ownership is concerned it is permitted.

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