Updated: 3G Auction completed after 34 days of bidding

[Honest 836]

3G competition to result in lower tariff: A Raja

CNBC-TV18

Communications and IT Minister A Raja said most foreign players are interested in bidding for 3G. Termination charges are being discussed by the Telecom Regulatory Authority of India, or TRAI, he said. The minister believes either lower termination charges or competition will result in lower tariff.

Raja believes intra-circle call can be 25 paise, while all-India can be about 40 paise. He said the ministry will not be putting more leverage on operators by collecting one-time spectrum changes. Telecom Ministry, he said, has no role in the security aspect of foreign operators.

[Honest 836]

3G Gets Delayed; Limits Players

Auction now on February 9

Communications and information technology minister A. Raja informed that NM Rothschild and Sons Ltd has been chosen as the independent auctioneer to help it sell licenses for the third-generation (3G) mobile phone radio spectrum.

According to a a report published today, "details of the 3G policy available so far show that Delhi and Gujarat will have three 3G operators each, Uttar Pradesh (west) and Himachal Pradesh - four, and West Bengal - two. Rajasthan and the north-east will not have 3G services because spectrum is not available in these regions. All other circles will have up to five operators."

At the same time, consumers waiting for private telecom operators to offer 3G services will have fewer options since the Department of Telecommunications (DoT) has decided to shrink the number of 3G players up to 5 per circle, including state-owned BSNL and MTNL.

We will also see further delay in the launch of 3G services in India. Earlier, the auction was scheduled for January 15, but now will be held on February 9. The information memorandum that will detail the 3G auction process will come out on December 8 and the final date for operators to bid in the auction has been fixed as December 31.

Courtesy : Techtree

[Honest 836]

CDG in talks with govt for auction in 450 Mhz band

Economic Times l 26 Nov 2008

SAN DIEGO: The CDMA Development Group (CDG), an international consortium of companies who have joined together to lead the adoption and evolution of 3G CDMA wireless systems around the world, is in talks with the Indian government on auctioning radio frequencies in the 450 MHz band for operators who use this technological platform.

India is slated to have third generation (3G) spectrum (airwaves on which telecom signals travel) auctions in January 2009. 3G will enable operators to offer high-end services such as high-speed Internet, faster downloads of movies and music, video conferencing, interactive gaming amongst features.

For CDMA players such as Reliance Communications, Tatas and Shyam Telecom, the 3G auctions will be limited to a single frequency band—800 MHz. While telecom regulator Trai had recommended that CDMA players be awarded 3G spectrum in 800 MHz, 1,900 MHz and 450 MHz bands, the government in its 3G policy decided to restrict the auctions to only the 800 MHz band.

We are in talks with the Indian government on this issue. As far as we are given to understand, radio frequencies in the 450 MHz may be available within the next couple of months,” CDG’s chief operating officer James S Person told ET.

Expressing confidence, Mr Person said that so far there had been significant progress on talks with the Indian government on this issue. He also added that it was important that India allocate this band for 3G operations as it had excellent propagation characteristics and could therefore be used to deploy low cost but efficient networks in rural India.

[Honest 836]

3G spectrum e-auction to garner Rs 30-35K cr

CNBC-TV18 l 3 Dec

The 3G mobile licence auction is likely to garner Rs 30,000-35,000 crore for the government.

Here is a verbatim transcript of Siddharth Zarabi’s comments on CNBC-TV18.

Independent agency, NM Rothschild had scheduled a presentation on e-auction document of 3G spectrum and broadband wireless services to inter-ministerial committee.

It is said to be a crucial step in way forward for 3G auction, as the auction is expected to raise at least Rs 30,000 to 35,000 crore.

The officials were apprised of the two step key e-auction, which will be conducted over the internet and will close very fast, which will again be an unique thing in selling of sovereign assets in the country.

In two weeks time, there will be a list of potential bidders coming in, once all the key steps happen.

[Honest 836]

Mobile 3G services by March: Raja

Press Trust of India l 3 Dec l Hyderabad

Mobile 3G (Third Generation) services are expected to be fully rolled out in the country by March 2009.

The Department of Communications, Government of India, will complete the auctions for 3G spectrum by the end of this month, according to Union Communications and Information Technology Minister A Raja.

The WiMAX auctions too would be completed by the end of January, 2009.

Talking to presspersons on the sidelines of the third Internet Governance Forum conference at the Hyderabad International Convention Centre here today, Raja said MTNL would launch 3G services by mid-December while BSNL would offer the services by the middle of January.

"We have given some advance leverage to MTNL and BSNL since they are public sector companies," Raja said.

He said that three slots would be put up for auction for 3G spectrum in each circle.

"Already, some private players have put necessary infrastructure in place to immediately launch the 3G services as and when they get the spectrum allotted," the Minister pointed out.

Once on, the 3G services would enable Internet access on mobile phones at a greater speed.

[Honest 836]

Spectrum allocation for 3G to be over before Feb '09: Behura

Press Trust of India l 4 Dec l Kochi

The allocation of spectrum for 3G and Broadband Wireless Access will be completed before February 2009, Telecom Secretary Siddhartha Behura said on Thursday.

"The bid document has been finalised and we expect to keep the time line", Behura said in his inaugural address at a seminar here.

Promising that the allocation and auction of 3G will be industry friendly, he said there will be a pre-bid conference between the industry and the government.

"The industry thinks we are doing a good job. We are doing our best. All circumstances cannot be foreseen. There were differences within the industry and government and they have been sorted out more or less," he said.

The country is now poised for the next generation area of 3G. The broad policy guidelines for 3G and BWA have already been issued and allotment of spectrum has been planned through simultaneously ascending e-auction process, Behura said.

"The 3G will become the predominant platform on which we will build and deliver upon India's broadband objectives. It can also be the effective tool for undertaking the social initiatives of the Government such as e-education, tele-medicine, e-health and e-Governance," he said.

India will exceed the targeted 500 million subscribers by 2010 and the bulk of the growth would be on mobile platform, he said adding the total number of mobile telephone connections in the country has reached over 320 million by October this year.

The mobile subscriber additions per month have now crossed 10 million mark and India has surpassed all other nations in terms of mobile subscriber additions, he further said.

[Honest 836]

3G auctions may leave most players without spectrum

TNN l 8 Dec l New Delhi

Contrary to the DoT's public claims, a draft information memorandum prepared by it reveals that no more than four 3G licences will be available for auction in any of the 22 telecom circles, while in 7 circles, it will be even less than four.

The telecom ministry has been indicating that it has spectrum for 8 to 10 3G licences per circle. If the memorandum is to be believed, it will lead to a trend towards consolidation rather than an increase in competition in the telecom sector. It’s impact, however, will be felt much after telecom minister A Raja's tenure comes to an end after March 2009.

At present, India has 11 to 12 mobile operators per circle, more than any other country in the world (see chart). Existing operators include Bharti Airtel, Vodafone, Aircel, Idea, Reliance, Tata Tele, BSNL and MTNL, while Unitech, Swan, Datacom (Videocon), Loop (Ruias) and Shyam (CDMA) are new entrants who are yet to launch services.

The government has already guaranteed MTNL and BSNL 3G spectrum in each of their circles. They will not participate in the auction, but will match the highest 3G bid.

This leaves Rajasthan and North East without a spectrum, West Bengal where there is spectrum for a single licence, Delhi and Gujarat which have two licences each, UP (West) and Himachal Pradesh with three each and all other circles with a maximum of four licences.

This implies that as many as 60% and in some cases even 80% of the operators in most circles will not have access to 3G spectrum. The extreme shortage of 2G spectrum and uneven distribution of 3G licences is bound to force consolidation in the sector within the next 18 months.

New entrants will be the most vulnerable as they are pitched against heavyweights like Bharti, Vodafone, BSNL and Tatas. In the final analysis, at least two of the existing operators could also be without any 3G spectrum, sharing their not-so-enviable situation with some of the new entrants.

Even Vodafone, which has an impressive global track record of winning auctions, believes bidding will be difficult without a clear line of sight to 3G spectrum. "Planning for spectrum auctions without any certainty on availability of spectrum is a major challenge," accepts Ashim Ghosh of Vodafone.

"Price is a factor of demand and supply. If just one slot is up for bidding, the bids are bound to be high. However , if the government announces 6 months later that it has spectrum for more bidders , it is not fair on the original bidder," says a senior executive from Idea.

The telecom ministry has said "increasing competition by breaking a cartel" is the driving force behind giving away 120 LoIs with 2G spectrum to new entrants in January 2008. Its strategy for 3G auctions will achieve exactly the reverse by forcing companies to consolidate and reduce the level of competition due to spectrum shortage. The gap between the 3G haves and have-nots will start hurting those who lose out by end 2010.

The fate of new entrants also hinges on whether the remaining companies, Datacom and Loop, will find global partners before 3G auctions begin. Amongst new entrants, Etisalat is probably the bestpositioned to beat some of the big Indian competitors.

[Honest 836]

Telecom Min refers matter of 3G slots to MoF

Press Trust of India l 9 Dec l New Delhi

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 Telecom 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 FinMin is expected shortly.

The reserve price for pan-India 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. As per the guidelines, in each circle five operators would be allotted the 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 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, that enable faster data downloads via mobile phones.

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 five 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.

[Honest 836]

TRAI moots 2 pc of highest 3G spectrum bid amount as admin fee

Press Trust of India l 10 Dec l New Delhi

Telecom regulator TRAI on Wednesday proposed two per cent of the highest bid amount of 3G spectrum auction as the annual administrative charge.

In its latest revised recommendations to the Government, it said two per cent of the highest bid amount in the 3G spectrum auction had been suggested as the annual administrative charge during the spectrum validity period.

"As this is an additional charge on the 3G spectrum bidders, DoT has to place this before the Telecom Commission for clearance. If okayed, this will raise the cost of licence for a 3G spectrum owner or the operator," said an official.

While TRAI has suggested this in response to a DoT reference over the spectrum charges for stand-alone 3G and existing 2G players, who would also bid and own 3G spectrum, DoT has accepted former's proposal on no segregation of 2G and 3G revenues.

Justifying the 2 per cent charge, TRAI said, "As the operators will take time to roll out their services after the allocation of spectrum, the Authority recommends a moratorium of one year from the date of allocation of spectrum in respect of the payment of administrative charge. It is being recommended as a transparent, just, fair and equitable criterion, specific to owners of the 3G spectrum."

"The all-India reserve price for 3G spectrum is Rs 2,020 crore and the number of slots to be auctioned in each circles has been referred to the Finance Ministry," the regulator said and added that it was possible to give 2G services also using the 3G spectrum and it was difficult to segregate between 2G and 3G services that could be provided using the 3G spectrum.

"Therefore, the standalone 3G operator who does not have any allotment of 2G spectrum should also pay an annual spectrum charge of 3 per cent of Annual Adjusted Gross Revenue, which is equivalent to the lowest slab of 2G operator. It is clarified that this is besides the administrative charges," TRAI clarified.

[Honest 836]

TRAI OKs higher spectrum fee

Economic Times l 10 Dec l New Delhi

Foreign telecoms firms looking to enter India by offering 3G services in the world's fastest-growing market for wireless services, will have to pay a higher annual fee for radio waves, the sector regulator said on Wednesday.

Approving a government proposal, the Telecom Regulatory Authority of India said such "standalone" operators who win 3G radio spectrum in an auction due in January would have to pay 3 percent of their revenue as annual fees.

The government had initially proposed a 3G spectrum fee of 1 percent of revenue, but revised that plan in November.

The spectrum fee will be in addition to an administrative charge of 2 percent of the highest bid for the spectrum, the regulator said in a statement.

India has set a reserve price of 20.20 billion rupees ($412 million) for spectrum covering all of India, but bids are expected at much higher levels.

The administrative charge will kick in one year after the operator receives the radio spectrum, the regulator said.

[Honest 836]

Telecom Commission to discuss admin charge on 3G players

Press Trust of India l 11 Dec l New Delhi

Department of Telecom will on December 19 consider adopting regulator TRAI's proposal for levying 2 per cent administrative charge from 3G players.

"Telecom Commission will discuss the TRAI proposal on administrative charge on December 19. Worldwide there are charges like this. But there is also a spectrum charge of 3 per cent.

"We have to see if this could put a burden on the prospective bidders", Telecom secretary Siddhartha Behura said here on the sidelines of India Telecom here.

TRAI on Wednesday proposed that companies successful in their 3G bids pay 2 per cent of the highest bid amount annually as administrative charges for utilising radio frequencies.

For standalone 3G players and new entrants who want to enter the Indian market via the 3G route, TRAI has proposed these companies share an additional 3 per cent of their annual gross revenues with the government.

The regulator's move to propose an administrative charge for using 3G radio frequencies is aimed at ending the ongoing controversy about the methodology for calculating to calculate this levy.

[Honest 836]

Bharti sees 3G launch in 6 mths of allocation

11 Dec 2008 l New Delhi l REUTERS

Bharti Airtel, India's leading mobile firm, said on Thursday it expected to launch third-generation wireless services within six months of the spectrum being allocated.

"Six months after spectrum allocation," CEO Manoj Kohli told reporters when asked when would the company launch 3G services.

The government has said it would auction 3G spectrum in January. Kohli said he expected the allocation to happen within a few weeks of the auction.

[Honest 836]

Addl 2% administrative fee won't impact 3G bid: TRAI

Moneycontrol l 12 Dec

It is one auction that the world will be looking to India for and that is the auction of 3G (Third Generation) spectrum. The Telecom Ministry says the process should be in place by January.

3G services finally kicked off in India with the Prime Minister Manmohan Singh making the first call on public sector MTNL’s network. However, even as this happened, the Department of Telecom, or DoT, has indicated that it is not comfortable with the TRAI's recommendation for levying an additional 2% administration charge.

Nripendra Misra, Chairman, TRAI (Telecommunications Regulatory Authority of India), said the levy of administrative fee is not likely to depress the auction bid because there is enough competition. "We moved away or are moving away now to a system where spectrum will be auctioned for 3G and broadband wireless access. It has become necessary to recognize its usage for the purposes of administrative fee, which the state must earn because this is the spectrum which has been allocated. This should also contribute to the revenue on a longer-term basis."

[Honest 836]

US asks India to clear the air on 3G

Economic Times l 13 Dec l New Delhi

The US is peppering India with questions on key policy issues in the telecom sector as the country gears up to auction 3G mobile phone spectrum, which will allow services such as high-speed internet and video-conferencing.

Among the queries raised by the US Telecommunications Sub-committee is whether India will change rules to allow foreign companies to bid for 3G spectrum as 100% foreign entities. The panel also wants to know how much time foreign players will get to find an Indian partner if their bids are successful.

India will auction 3G airwaves in January. US telecom firms such as AT&T and Verizon, which have been trying to enter India for the past two years, are not present in the world’s second-largest market for wireless services with more than 300 million subscribers. The American contention is that the current 3G policy does not favour the entry of new foreign players.

Existing regulations don’t allow foreign telecom companies to hold over 74% in their Indian ventures. So, a 100% foreign-owned entity entering the Indian telecom market must find an Indian partner to hold a 26% stake in the joint venture.

“In following international best practices, India should allow for a full and complete opportunity for new and international investors to participate in the auction process,” the panel has told the Parliamentary Standing Committee on IT and Telecom in a letter.

The US is also pointing out that while new 3G players will have to pay $410 million to obtain a UAS licence to provide wireless and wireline services, they won’t get the start-up 2G spectrum that is required to provide traditional voice and data services. “How does the Indian government plan to address this imbalance?” it asked. So far, the UAS licence, which costs Rs 1,651 crore, came bundled with start-up 2G spectrum. Currently, all telecom services in India are offered on 2G frequencies.

The panel has also asked India to fully open up internet telephony in line with telecom regulator Trai’s recommendations, and enact strong data protection laws so that the rapidly-growing Indian IT and BPO companies ensure confidentiality of their global clients’ information. At present, voice calls over the internet can be made only between two computers. In August, Trai recommended removal of all curbs on internet telephony and allow calls to be made to land phones and mobiles in India and abroad.

The panel has also raised the issue of double taxation of international carriers such as British Telecom, AT&T, Cable & Wireless and Verizon, all of whom offer long-distance services (carrying STD, ISD voice traffic and data) to Indian enterprises.

Foreign carriers use the infrastructure of existing operators as they don’t have networks spanning whole India. Under current rules, they pay licence fees twice to the government — once when they buy bandwidth from the existing operators and again when they resell it to enterprises.

[Honest 836]

3G contest to kick off on Jan 16, WiMax to follow

Economic Times l 13 Dec l New Delhi

The government has finally unveiled the details of the upcoming 3G spectrum auctions and said that the online bids for bagging these airwaves will begin on January 16. The department of telecom (DoT), in its ‘information memorandum’ has also said that the auction of spectrum for Broadband Wireless Access (BWA), which supports technologies such as WiMax, will be held two days from the close of the 3G auctions.

Third-generation mobile technology, or 3G, will allow telecom companies to offer high-end services such as high-speed internet, interactive gaming, ultra fast downloads of movies, video clips and music files, video calls all on the mobile. WiMAX is a technology that allows the user to access high speed internet and other data applications wirelessly.

While WiMAX is largely used for data services it also holds the potential to carry voice calls and is therefore considered a threat to 3G telecom technology since both platforms are used for similar applications. Currently, all telecom services in India are offered using second generation (2G) cellular technology.

According to the DoT, the timeline for the much awaited auctions are as follows: There will be pre-bid conference on the December 23 and the final date for submissions for applications has been set at January 5, 09. The names of those bidders who pass the eligibility criteria will be announced on January 9 followed by mock auction between January 12 and 13.

The government’s ‘information memorandum’ has for the first time provided clarity on the quantum of spectrum available for 3G auctions. So while the spectrum crunch in Delhi will mean no more than 2 private GSM players can offer 3G services, Mumbai, India’s most lucrative telecom market will see at least 4 GSM players offering high end 3G services.

State-owned telcos -- BSNL and MTNL have already been awarded 3G and WiMAX spectrums across all cirlces. Most other circles will see four private GSM players and BSNL offer 3G services, except Gujarat and Himachal which has sufficient spectrum for only three private players, UP (West) for 2 and West Bengal which only a single private player can be accommodated.

The DoT has also clarified that with regard to WiMAX spectrum, three private players could be given these frequencies in each of the 22 telecom circles in the country. The auctions will be a four stage process—invitation stage, pre-qualification, biding and grant of spectrum. Existing Indian operators as well as some foreign telcos are expected to participate in the upcoming 3G and WiMAX auctions. The DoT has also said that foreign players can bid as 100% entities.

However, a foreign player entering the Indian telecom market as a 100% entity needs to find an Indian partner to hold a 26% stake in the joint venture before it launches commercial services. Further, in a bid to encourage foreign telcos to participate, the DoT has also said that mobile number portability would introduced soon.

MNP, which allows customers to retain their mobile numbers even as they switch operators will allow new entrants to lure some of the existing subscribers from the incumbents.

[Honest 836]

Unfair to suggest admin charges for highest 3G bid: COAI

Moneycontrol l 15 Dec

Cellular Operators Association of India or the COAI has written a strongly worded letter to the department of telecommunication criticizing TRAI’s plans of levying an annual administrative charge of 2% on the highest bid for 3G.

The COAI (Cellular Operators Association of India) has informed the Department of Telecom (DOT) that the imposition of additional administrative charge of 2% is a retrograde step. It said the step is 'illogical, incorrect and unfair' to recommend administrative charges.

The TRAI had proposed an annual 2% administration charge on the highest bid for 3G. This charge would add to the cost of service. Recovery of the charge would be through auction price and spectrum usage charges.

The move would amount to thousands of crores over the license period and add to the cost of service. The sector is “already burdened with a plethora of duties and levies adding upto as much as around 30% of the revenues,” the COAI believes.

The COAI has suggested that the charges for the 3G spectrum be recovered through auction price and a spectrum usage charge as originally planned. If an admin charge is to be imposed, it should be in place of the slab system of spectrum usage charges.

According to the DoT, the 3G auction yield could fall by Rs 5000 crore due to 2 % admin charge. Its initial estimates of yield were at Rs 35,000-40,000 crore. It has left the final decision on this levy to Full Telecom Commission.

[Harshal 11]

The New Spectrum Tussle - 3g V/s Wimax, Telecom war enters 3G, WiMax space

MUMBAI: Round one of the telecom technology war has gone to the GSM platform, with CDMA taking the backseat. A second war for supremacy is brewing between the soon-to-be-launched 3G and WiMax technologies. Both are platforms for providing high-speed internet on mobile, enabling video calls, movie downloads and other multimedia applications on mobiles.

The differences between the two technologies are coming to the fore ahead of the spectrum auction next month. Ericsson - the biggest supporter and equipment vendor of 3G - is laying claims on the 2.3 GHz spectrum band, which is meant for WiMax in India.

On the other hand, WiMax Forum, the international body supporting the deployment of WiMax, says that it has products certified for use in that band, which is most spectral efficient for offering high-speed internet on mobile.

WiMax stands for Worldwide Interoperability for Microwave Access. It can also be used to provide voice services and rivals 3G as both the platforms are used for similar applications. 3G, however, is considered to be voice-centric and may be used for easing network congestion before high-end data services can be offered.

According to the Department of Telecom (DoT), the 2.1 GHz band spectrum will be used for 3G, while 2.3 GHz and 2.5 GHz have been earmarked for Broadband Wireless Access (BWA), which is considered synonymous with WiMax.

However, Ericsson CTO Hakan Eriksson said that BWA is a family of technologies, which include 3G, HSPA (high speed packet access), LTE (long term evolution) and WiMax.

"There is nothing that specifies that it is only for WiMax," he told ET.

WiMax Forum, however, feels otherwise. "2.3 and 2.5 GHz bands are globally harmonized as per the International Mobile Telecommunications (IMT)-2000 standard. As a telecom professional, I have not seen a 3G network operational in these two bands anywhere in the world," WiMax Forum India chapter chairman C S Rao said.

WiMax, which can be fixed as well as mobile, mainly operates in the 2.3 - 2.7GHz range. Japan and the US are using both 2.3 and 2.5 for WiMax/OFDMA, said Mr Rao.

Several mobile WiMax products operating in the 2.3 GHz-2.5 GHz band, such as Sprint Nextel in the USA, have been certified by the WiMax Forum.

Ericsson, however, anticipates the presence of two billion mobile broadband subscribers by 2013, with a majority using 3G networks. "I don't think WiMax will ever break the 10% market share," said Mr Eriksson.

For BWA, the DoT auction will distribute two 20 MHz blocks in both the 2.3 and 2.5 GHz bands. In the 2.1 GHz 3G band, spectrum will be auctioned in blocks of 5 Mhz. The success of both 3G and WiMax will largely depend on the strength of the ecosystem. The larger the number of equipment vendors, software suppliers and operators, the more will be the usage. The networks will be deployment countrywide next year.

Source: ET

Edited December 16, 2008 by Honest
<< Topic Merged >>

[Honest 836]

Govt set to reject TRAI's 3G admin tax proposal

Economic Times l 16 Dec l New Delhi

The telecom ministry is set to reject a proposal to impose an 'administrative tax' on successful bidders of 3G wireless frequencies, fearing such a tax could impair revenue collections at the upcoming auction of spectrum by more than Rs 5,000 crore.

Last week, telecom regulator TRAI had proposed that successful bidders at the January 16 auction of 3G spectrum pay 2% of the highest bid amount each year as administrative charges for utilising the 3G spectrum. However, the government's department of telecom (DoT) has told the Telecom Commission that this tax 'will reduce the revenue received in the January 2009 auctions for 3G spectrum by about Rs 5,000 crore', according to a letter sent by the DoT.

The commission, the country's key telecom decision-making body, generally follows DoT's advice. All its members are top DoT officials, making its chances of rejecting the department's advice absolutely slim. The Telecom Commission is to debate the TRAI proposal on December 19.

Analysts expect the auction of 3G spectrum, which will allow services such as high-speed internet and video-calling on mobile phones, to fetch the government up to Rs 30,000 crore ($6 billion), although communications minister A Raja has said the amount could be as much as Rs 40,000 crore.

Justifying its opposition to TRAI's proposal, the DoT has told the telecom commission that all bidders will factor in this 2% annual charge for the next 20 years - the 3G spectrum is allotted for this period - when they put in their bids. The DoT fears that companies could substract the amount they would have to pay as taxes from their spectrum bids.

Setting out its argument, the DoT said if the highest bidder at next month's auction offered to pay 2.5 times the reserve price of Rs 2,020 crore, the administrative tax that would apply to the 3G sector spanning five operators in each telecom circle would be around Rs 500 crore a year.

This would work out to around Rs 10,000 crore over the licence period of 20 years, which would mean about Rs 5,300 crore in today's money assuming a discount rate of 7% to factor in inflation.

The DoT has also pointed out globally telecom operators pay administrative taxes or share a percentage of their annual revenues, but not both. In India, TRAI has proposed both. "As per TRAI's recommendations, the winners of the 3G spectrum will have to pay upfront the bid amount, plus annual spectrum usage charges and an administrative charge of 2% which seems to be on the high side," DoT said.

Meanwhile, the Cellular Operators Association of India (COAI), an industry body of GSM players, on Monday said that the industry viewed TRAI's proposal to impose this additional charge as a retrograde step. It said TRAI's proposals were "a serious setback to both the potential Indian as well as foreign bidders for 3G and would create a serious negative perception of the auction process".

"The Indian telecom sector is already burdened with a plethora of duties and levies adding up to as much as around 30% of the revenues of the industry...The last thing the industry needs is yet another levy in the form of an administrative charge," COAI director general T V Ramachandran said in a statement.

Mr Ramachandran noted that at a time several industry sectors were seeking bailout packages, the Indian telecom sector continued to perform well and had the lowest tariffs in the world.

"In these circumstances, the industry would expect some support from the regulator and government to reduce the imposed burden on the sector. At the very least, we expect that the burden would not be increased in such an unwarranted manner as is being recommended by TRAI," he added.

[Honest 836]

COAI offers ideas for allotting 3G to waiting-list bidders

Moneycontrol l 16 Dec

The Cellular Operators' Association of India (COAI) has suggested two approaches to the Department of Telecommunications (DoT) for allotting 3G spectrum to bidders in waiting list. The COAI has asked the DoT to allot spectrum at bidder’s final prices.

In cases of circles with three slots, the government should decide on the second highest bid price. In cases of circles with two slots, the government should decide on the third highest bid price. In case of circles with one slot, the government should decide on the fourth highest bid price, the COAI has suggested.

[Honest 836]

Finmin backs plan to limit 3G play to 5 per circle

Economic Times l 17 Dec l New Delhi

The finance ministry has endorsed the communications ministry' decision to limit the upcoming 3G auction to five players per circle for private companies and state-owned telcos.

This comes as the communications ministry had explained to the finmin that even in those circles where more players could be accommodated, it would not be prudent to auction away all the radio frequencies. Further, the communications ministry has also added that the government should always hold some spectrum in reserve.

The auctions of 3G spectrum which will enable telcos to offer high-end services such as faster downloads of video clips, music files and movie trailers, video calls, amongst other services is slated to happen on January 16. At present, all telecom services in the country are offered on 2G radio frequencies.

But, in nine of India's 22 telecom circles, where there is no adequate spectrum to accommodate five players, the DoT has decided to go ahead with the auctions for only the available slots. The proposal by the finmin to have full-fledged auctions in these nine circles and put operators on a waitlist until they awarded 3G spectrum has also been shelved, said a government source close to the development.

Meanwhile, industry bodies representing operators on both platforms - GSM and CDMA - have written to the government seeking clarifications as well as changes to the proposed auction guidelines. The Cellular Operators Association of India, the body representing all GSM players on Tuesday said that since 3G spectrum was limited, successful bidders can wait till this resource is made available for simultaneous allocation to all'.

COAI also added that bidders who have to wait for spectrum should not be asked to match the highest bid as specified in the 3G policy. As an alternative approach, the COAI said, in case there are three slots available, then the second highest bid will be deemed as the winning bid and where two slots are present, all successful players be mandated to pay the price quoted by the third highest bidder.

The Association of Unified Service Providers of India, the body representing CDMA operators have demanded that the government specify the auction roadmap for telcos on this technology platform. The Jan 16 auctions are only for GSM players. The industry body has also asked the DoT to clarify on what would be the entry fee for new entrants who bags 3G spectrum during the auctions. Besides, it has also asked the DoT if these new entrants who bag 3G spectrum will be given 2G frequencies.

[srk006 21]

Every one is talking about 3G with GSM. What about the spectrum for EVDO! No one interested?

[Honest 836]

^^^

EVDO is not expected in India in the near future my dear friend. And 3G is going to be launched soon. Thats why everyone is talking about 3G.

[Honest 836]

TRAI wants govt to come clear on 3G policy

Economic Times l 18 Dec l New Delhi

Telecom regulator TRAI has asked the communications ministry to address matters pertaining to 3G auctions. The regulator wants the government to come clean on the 3G licences to be issued to the new entrants and the licence fees. It has also sought to know whether 2G spectrum would be allotted to the successful 3G bidders.

The 3G spectrum auction, which will allow operators to offer high-end services such as faster downloads of video clips, movie trailers and music files, video calls and interactive gaming is slated to be held on January 16. The existing telecom services in India operate on the 2G spectrum.

TRAI’s observations assume importance, given that the US has also sought clarity on the 3G policy. Industry observers fear the government could face legal challenges if it is not forthcoming with details.

Under existing guidelines, the successful 3G auction bidders will have to pay Rs 1,651 crore for a UASL licence that entitles them to offer all communication services. But TRAI has pointed out that terms and conditions for granting a UASL licence were formulated in 2001 and expressed doubts whether these could be applied now. The regulator also wants to know about DoT’s plans to provide 2G spectrum to the successful 3G bidders.

The regulator is unsure whether there is adequate spectrum for the existing operators. It has demanded transparency in the entire process of spectrum allocation. “DoT is expected to take into consideration these pre-requisites while granting UASL licences. Failure to do so would result in hoarding of spectrum,” the regulator added.

The US said that while new 3G players will pay $410 million for a UASL licence, they would not get 2G spectrum required for providing traditional voice and data services. So far, the UASL licence, costing Rs 1,651 crore, came bundled with start-up 2G spectrum. “How does the Indian government plan to address this imbalance?” a US telecommunications sub-committee has asked.

[Honest 836]

Telecom panel to decide on spectrum charges tomorrow

Press Trust of India l 18 Dec l New Delhi

The Department of Telecom (DoT) is likely to finalise tomorrow the revised spectrum charges ranging between 3-8 per cent for telecom operators and also deliberate upon the number of operators to be allowed in next generation, 3G, telephony.

The Telecom Commission is meeting tomorrow to discuss a proposal suggesting increasing the minimum annual spectrum charges to three per cent of gross revenue for 4.4 MHz spectrum from existing two per cent.

According to the agenda for the meeting, the Commission would also take a final decision on how many players would be allowed to bid for 3G spectrum depending upon the spectrum availability in each circle.

There were different views over the number of slots of 3G spectrum to be auctioned in the first round. The availability of spectrum in 2.1 GHz band (for 3G mobile services) varies from one telecom service area to another, sources in the DoT said, adding that in certain circles, there is no spectrum available, while in other different amounts are available.

Discussions are also going on with the defence authorities regarding the demand for spectrum and its vacation and coordination issues.

The issue of defence is not likely to be resolved before the proposed date of 3G auctions in January 2009, sources said, adding that in such a case it would not be prudent to auction all the available spectrum right away. "If additional spectrum remains available for mobile telephony services it can be subsequently allocated on terms to be decided in consultation with the telecom regulator Trai," sources added.

[Honest 836]

DoT may seek cabinet nod for 3G issues

Press Trust of India l 19 Dec l New Delhi

The Department of Telecom is likely to seek a cabinet nod on a host of issues concerning 3G mobile telephony, including number of slots for auction, increased annual spectrum charges and administrative fee as suggested by TRAI.

While a ministry spokesperson did not say anything beyond "the Telecom Commission (the policy making wing of DoT) met today", sources said DoT has started the process of preparing a cabinet note on 3G issues after the meeting.

According to sources, no decision could be arrived at on three key issues that came up for consideration on Friday, number of slots to be announced for auction, finalisation of increased spectrum charges at 3-8 per cent, and TRAI's suggestion for a 2 per cent (of the highest bid on a 3G spectrum auction) administrative charge.