Updated: 3G Auction completed after 34 days of bidding

[Honest 836]

No administrative tax on 3G winners: Tele Commission

Economic Times l 20 Dec l New Delhi

Telecom Commission, the decision-making body for telecommunications, on Friday rejected a proposal to impose an ‘administrative tax’ on successful 3G bidders, fearing that such a tax could impair revenue collections at the upcoming spectrum auction by over Rs 5,000 crore.

At the same time, the commission has asked the Cabinet Committee on Economic Affairs (CCEA) to submit its views on the issue. The commission has also sent a note explaining the reasons behind its move to Prime Minister Manmohan Singh, as the administrative tax issue involves the finance ministry, which is currently being handled by the PM.

Telecom regulator Trai had last week proposed that successful 3G bidders pay 2% of the highest bid amount annually as administrative charges for using the spectrum. However, the department of telecom (DoT) warned the Telecom Commission against approving this tax “as it would reduce the revenue received from the January 2009 auctions for 3G spectrum by about Rs 5,000 crore.”

The Telecom Commission’s decision will become a policy only after it is endorsed by communications minister A Raja. DoT sources told ET that Mr Raja is likely to endorse the move on Monday. Earlier this week, ET reported that the commission would reject Trai’s 3G admin tax proposal in its Friday meeting. The commission has also sought CCEA’s inputs on restricting the upcoming auction for 3G wireless frequencies to five players a circle after an NGO filed a PIL in the Delhi High Court challenging the cap. The commission gave its in-principle approval to the restriction on Friday.

The finance ministry has already endorsed the communications ministry’s decision to limit the upcoming 3G auction to five players. The communications ministry had reasoned that it won’t be prudent to auction all the spectrum, even in circles where more players could be accommodated, and some spectrum should be kept in reserve.

It also pointed out that auctioning all the 3G spectrum would lead to problems in 'future availability of radio frequencies for defence needs'. However, the NGO's PIL alleges that the DoT move is against Trai’s recommendations, which said that all 3G spectrum should be auctioned to maximise the government's revenues.

The CCEA is likely to endorse DoT’s (as well as the the commission's) stance on this matter as the communications ministry has pointed out that since there was a huge disparity in the availability of 3G radio frequencies across circles, any move to auction away all the spectrum would result in major disparities in the number of players in each circle.

[Honest 836]

3G fee may go to Cabinet

Business Line l 19 Dec l New Delhi

Telecom panel not for administrative charges.

The Department of Telecom may refer the issue of levying administrative charges on 3G mobile operators to the Cabinet Committee on Economic Affairs. The levy was proposed by the Telecom Regulatory Authority of India. The decision is likely to be left to the Cabinet since DoT does not agree with the regulator’s proposal.

The Telecom Commission, which is the apex decision-making body of DoT, met on Friday to consider the proposal. According to sources, DoT has opposed levying the additional fee on the grounds that it will get factored in by the operators when they bid for the spectrum.

DoT has estimated that the total income from the auction could come down by as much as Rs 5,000 crore if the administrative charges are levied. TRAI had suggested the fee on grounds that as 3G spectrum was being auctioned, the Government could not continue to impose a spectrum usage fee as in the case of 2G mobile services.

The regulator has suggested that operators should be asked to pay 2 per cent of the highest bid amount every year as administrative charge.

For quick decision

The GSM operators have opposed the introduction of the fee. According to the existing rules, DoT has to send the proposal back to TRAI if it does not agree. However, it may go through the Cabinet to get a quick decision since DoT is planning to hold the auction by January 16, 2009.

[Honest 836]

3G pre-auction meet on Tuesday

Economic Times l 23 Dec l New Delhi

India’s 3G road map is all set to kick off on Tuesday with the pre-bid conference when the government will answer queries related to the 3G bidding and spectrum allocation. This will be the final opportunity for operators to clear the air on issues including frequency bands, rollout obligations and licence conditions.

The department of telecom (DoT) has deputed a high-level team including all its senior officials to engage with operators during the day-long pre-bid conference. After the conference, the DoT will ask all operators wanting to participate in the 3G auction to submit their applications by January 5, 2009.

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). Communications and IT minister A Raja has said the amount could be as much as Rs 40,000 crore.

Telcos who are bidding for both 3G and Broadband Wireless Access (BWA, used for technologies such as WiMax) spectrum are expected to seek policy changes from the government during the pre-bid conference. For instance, the WiMax forum demanded on Monday that the government address some key issues before going ahead with the auctions.

“The current policy states that 3G spectrum will be given for a period of 20 years, while for BWA, the tenure is only 15-years. The government must put both technologies at par,” the forum’s India chapter chairman CS Rao said, during an interaction with the media on Monday.

Mr Rao also said that the government’s move to give WiMax spectrum in the FDD (paired) mode to BSNL in three circles - Maharashtra, Gujarat and Andhra Pradesh — was in violation of international standards. Professor Arogyaswami Paulraj, considered to be the father of WiMax and the CTO & co-founder of WiMax chips firm Beceem Communications, pointed out that globally WiMax operated in 2.3 GHz and 2.5 GHz frequencies in the TDD mode only.

“The move to give spectrum to BSNL in another mode was to favour just one vendor. This will ensure that no other player will be able to offer WiMax services in these three states,” he added. Professor Paulraj also heads the Smart Antennas Research Group at Stanford university.

Foreign telecom operators have pointed out that while they have to pay $410 million to obtain the UAS licence to provide mobile services if they succeed in their 3G bids, they won’t get the start-up 2G spectrum that is required to provide traditional voice and data services.

Currently, all telecom services in India are offered on 2G frequencies. The new players, who are eyeing the India market, will therefore ask the government to come clean on this issue during Tuesday meet, said an executive with a foreign operator.

These companies also want the government to mandate roaming between 2G and 3G networks as a new entrant offering 3G services will not have a pan-India network and its customers will have to use the networks of existing operators while on roaming. But if existing telcos fail to enter into commercial agreements with the new entrants, the latter will not have a viable business model.

[Honest 836]

India upbeat on 3G auction, moves to hook foreign cos

REUTERS l 23 Dec l New Delhi

India is confident the global financial crisis will not derail its auction of 3G mobile services spectrum due in mid-January, hanging out the prize of a larger foothold in the world's fastest growing wireless market.

The government hopes to raise $8.2 billion from the sale, and in a move to hook major overseas players it now plans to make new entrants winning third-generation radio waves eligible for space on the 2G spectrum as well.

"We have great hopes," R Ashok, member of the Telecom Commission, the apex government body for the sector, told reporters at a news conference when asked how firms were responding amid the financial gloom.

Adding potential 2G spectrum to the offer, it is hoped, will make it easier for new foreign entrants to enter an extremely price-sensitive market where most use their mobile phones for voice calls and expensive data services take time to bear fruit. 3G service enable customers to watch live mobile TV, download music and browse the Internet at high speed.

The auction will start on Jan. 16 for 20 of India's 22 telecoms service areas or circles, and four 3G slots in most of these regions have been put on the block. The reserve price for pan-India spectrum has been set at 20.20 billion rupees ($414 million), but bids are expected to be much higher and the telecoms minister sees the auction generating revenue of 300-400 billion rupees. "I suppose it is quite probable that we will meet the target," Ashok said.

Currently, telecoms firms in India offer only second-generation mobile services in a market seeing rapid growth with about 10 million new users being added every month. International telecoms firms such as Vodafone, SingTel, Telenor, Etisalat, TM International and Maxis, which are already present in the country through partnerships with Indian firms, will be able to bid through these ventures for 3G spectrum.

TV Ramachandran, the head of a nine-member telecoms lobby group, described the offer of 2G radio waves for new arrivals as an "act of fairness" which would spur interest from foreign firms.

[ravi_patent 28]

Some telcos want delay in 3G auction

http://www.business-standard.com/india/new...n/05/36/344170/

The 3G and broadband wireless access (BWA) spectrum auction is running into further controversies with a section of telecom firms opposing the timing of the auction and internet companies planning to move the Prime Minister’s Office (PMO).

Even though Reliance Communications (RCom) is ready with $1-billion investment for 3G rollout, it intends to focus on GSM rollout at the moment. The company is “receptive to the opinion that the 3G auctions should be held at a later date,” a source close to the development told Business Standard.

This follows a similar move by Vodafone-Essar. The GSM major had earlier written to the Department of Telecommunications (DoT) seeking postponement of 3G auctions. The company had said the global financial crisis would make mobilising funds an “extended process”.

Gartner Principal Analyst Naresh Singh said: “The financial crisis shouldn’t be a concern as the reserve price of Rs 2,200 crore is not too high for any of these companies. The 3G spectrum auction has already been delayed and the industry wants the government to go ahead with the auction. Moreover, a cash crunch in the industry will lead to more realistic auction bids that will be beneficial to the customer.”

Meanwhile, the Internet Service Providers Association of India (ISPAI) plans to move the PMO over the telecom ministry’s move to seek surrender of the earlier-issued BWA spectrum.

“BWA spectrum was allocated to five internet service providers in the country and these firms have been paying for it for the last couple of years. Now the ministry wants us to surrender it and participate in the forthcoming auction,” ISPAI President Rajesh Chharia told Business Standard.

This, say companies, is not viable as there is no clarity on the issue. ISPAI had taken up the issue with the Telecom Regulatory Authority of India and the telecom ministry “unsuccessfully”. “We are not seeking postponement of the auction but we want to know whether our members will be allocated the same amount of BWA spectrum and at the earlier price,” Chharia said.

[Honest 836]

3G winners eligible for 2G too, says DoT

Economic Times l 24 Dec l New Delhi

The communications ministry on Tuesday said that new entrants winning third-generation (3G) spectrum in the auctions next month will also be eligible for second generation (2G) radio frequencies. However, foreign telcos, who plan to bid for 3G spectrum, have sought more clarity.

“A new entrant in 3G, who has obtained a licence, will be kept in the queue for 2G spectrum,” R Ashok, member (finance) at the Telecom Commission, the communications ministry’s highest decision-making body, said at the pre-bid conference in the New Delhi. Mr Ashok, however, didn’t divulge further details.

Currently, all services in India are offered on the 2G radio frequencies. The 3G spectrum will allow telecom companies to offer high-end services such as fast downloads of music files and video clips, interactive gaming and video calls and TV on the mobile.

Executives at leading telecom operators say Mr Ashok’s statement implies 2G spectrum will be allotted to the new entrants, keeping in mind the future spectrum requirements of existing telcos.

International telcos that ET spoke to termed Mr Ashok’s statement as a ‘gimmick’. “The Department of Telecom (DoT) has only said that new entrants, who succeed in the 3G bids, will have to wait in queue. They have given no other details. Foreign operators can’t plan their business model unless they have further clarity,” an executive with an international operator said, requesting anonymity.

An executive with another global operator said that currently, there were already about 400 applicants waiting in the queue for 2G spectrum.

“If the government meant that we will get 2G spectrum after these companies, it will need to find spectrum more than what is globally available,” he said.

The government also said that it would unveil the policy to enable mobile virtual network operators (MVNOs) to launch services in India before the 3G auctions. MVNOs are companies that don’t own any telecom infrastructure but buy airtime (minutes of usage) from existing operators. They market and sell it using their own brand.

The model is experiencing phenomenal growth particularly in the 3G space globally, as MVNOs are able to connect to end-users through highly-specialised value-added services and superior branding experience.

This is the first time that the government has said that new players in the 3G space will be considered for 2G spectrum also. Recently, the US had asked India to clarify finer details of its 3G policy, especially on the roadmap for successful bidders. Apart from the US, several international operators had also pointed out that 3G players will have to pay $410 million to obtain a unified access service (UAS) licence, but won’t get the start-up 2G spectrum which is required to provide traditional voice and data services.

The communications ministry on Tuesday also clarified that new entrants will be allowed to acquire an existing telco prior to the bidding process and still participate in the 3G auctions. A DoT official present at the meet also added that the M&A guidelines for telcos will also apply to the Internet service providers (ISP), who bid for broadband wireless spectrum such as WiMax spectrum. At present, the M&A guidelines do not cover the ISPs.

The DoT also said that it won’t make it mandatory for telcos to enter into roaming agreements with each other.

Foreign players had asked the government to make it mandatory to have roaming agreements between 2G and 3G networks as new entrants in the 3G space will not have a pan-India network and their customers will have to use the networks of existing operators while on roaming. But if existing telcos fail to enter into commercial agreements with the new entrants, the latter will not have a viable business model.

[Honest 836]

Blame it on Cabinet, 3G auctions likely to miss January date

Economic Times l 26 Dec New Delhi

The auctions for 3G spectrum, vital for next-generation telecoms services such as video-calling and broadband internet on mobile phones, are set to be delayed beyond its scheduled date of January 16 and may take place in February, according to a top official in the communications ministry.

“The auctions have been delayed as the Cabinet is yet to approve some of the key proposals regarding the auctions,” the official, who asked not to be named, said. However, industry executives said the auction may end up being deferred for a longer time. “If the auctions are delayed by more than a month, it may not happen during the UPA rule. This is because, the code of conduct for the general elections will kick in from March 2009,” said a top executive with a telecom company that is looking to participate in the third generation or 3G auctions.

This executive, who asked not to be named and his company not be identified, also said he had received information from government officials on the auctions being deferred. According to the official, the primary reason behind the Department of Telecom’s (DoT) move to defer the auctions was the poor response to the 3G pre-bid conference on Tuesday by new firms, including foreign players. While the DoT has allowed foreign operators to participate in the 3G auctions, most international players have indicated that they are likely to give it a miss. Global operators have also pointed out that the auction guidelines have been structured to favour only existing Indian operators and have sought several changes to the country’s 3G policy.

Another possible reason could be that foreign players and some Indian companies such as Reliance Communications and Swan have sought additional time to study the information memorandum, which contains all details regarding the auction.

This memorandum, which lists out the spectrum slots and its availability in each circle, was released on December 12 and global telcos have pointed out that a 30-day timeframe would not be sufficient to plan for a multi-billion dollar 3G bid. But officials of the ministry of communications maintained that the delay in Cabinet clearance is holding things up.

Analysts expect the 3G auction to be a subdued affair due to the global financial crunch. Most analysts said the auctions could fetch the government anywhere between Rs 20,000 crore and Rs 30,000 crore ($4-$6 billion), although communications minister A Raja is confident that the amount could be as much as Rs 40,000 crore.

Last week, the Telecom Commission, India's telecom decision-making body, had rejected 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 spectrum auction by over Rs 5,000 crore. The commission, after turning down Trai’s recommendation that successful 3G bidders pay 2% of the highest bid amount annually as administrative charges for using the spectrum, had sought the Cabinet endorsement on its decision. Besides, the Telecom Commission had also sought Cabinet approval for its decision to restrict the upcoming 3G auction to five players per circle. This was because of a legal challenge in the Delhi High Court to DoT's move to limit the number of 3G players to five in a circle.

“The Cabinet may take time to clear these proposals — we cannot go ahead with the 3G auctions unless the Cabinet approval comes through,” the communications ministry official added. The DoT may also use this extended period to offer more clarity on the auction process and the policy to foreign telcos. For instance, foreign operators have termed the DoT's recent announcement that new telecom players which win 3G spectrum in the auctions will also be eligible for second generation (2G) radio frequencies, as a mere “gimmick” “The DoT has only said new entrants who succeed in 3G bids will have to wait in queue. They have given no other details. Foreign operators can't plan their business model unless they have further clarity,” said an executive with a multinational telco requesting anonymity. At present, all telecom services in the country are offered on 2G radio frequencies.

An Indian representative of another global telco said the current policy did not specify how new entrants would be allotted additional spectrum in future. The executive added that as successful overseas 3G bidders would get a mere 5 MHz, they would not be able to compete with existing operators such as Bharti Airtel and Idea Cellular, which already had up to 10 MHz of 2G spectrum and are likely to get another 5 MHz of 3G spectrum in the auctions.

[ipkonfig 10]

Thanks for the info...this was expected...

[Honest 836]

India puts back 3G spectrum auction

Economic Times l 29 Dec l New Delhi

India has deferred a global auction of third-generation wireless spectrum by around two weeks, a leading telecoms industry official said on Monday.

TV Ramachandran, director general of the Cellular Operators' Association of India, which represents nine mobile operators, said he had been told the auction would now take place at the end of January, instead of mid-month.

"That's what I have been told," Ramachandran said, without elaborating, when asked if there had been a delay.

The government had set a date of Jan 16 for the auction to begin.

A telecoms ministry spokesman, when contacted, could not comment immediately.

Ramachandran said the deadline for auction applications had been extended by 15 days to Jan 20, from Jan 5 set earlier.

An official with a leading Indian telecoms firm, who did not want to be named, said he had heard about the delay, and that he expected a government statement by the end of the day.

India plans to auction 3G wireless spectrum in 20 of its 22 service areas and has said firms could bid for four 3G slots in most of the regions.

The telecoms minister expects the auction to generate revenues of $6.2-$8.3 billion, and an official in his ministry has doused fears the global financial crisis would lead to sharply lower bids.

[Honest 836]

Govt to kick off spectrum 3G auction on Jan 30

Press Trust of India l 29 Dec l New Delhi

The Government has deferred 3G spectrum auction to January 30, delaying it by 15 days.

Telecom Secretary in an internal letter said, "In view of the large number of requests from potential bidders, it is only fair that they should be given some time.

Accordingly it is decided that the auction process be shifted by a fortnight and the CCEA decision will be available by that time and we will have a clear mandate to proceed as per their decision".

As per the new revised timeline, applications will now be invited from January 9, 2009 and the final date will be January 15.

The Department of Telecom will announce the ownership details of the 3G applicants on January 16, which was the earlier date of spectrum auction and on January 20 bidder Onwership compliance certificate for the 3G auction will be given.

It will shortlist pre-qualified bidders for the 3G spectrum auction on January 22 and while the mock auction will take place between January 27-28. And, the 3G spectrum auction will take place on January 30 while Brodband Wireless.

[Arun 795]

Finance Ministry recommends double the minimum price for 3G spectrum

Further delay expected?

1 Jan 2009, 20:26 hrs IST

Economic Times

The Finance Ministry has asked the Communications Ministry to double the minimum price for 3G spectrum bids to Rs 4,040 crore for a

pan-India licence and for broadband wireless access (BWA) technologies such as WiMAX to Rs 2,020 crore, possibly delaying the auctions still further.

The fresh demands by the Financial Ministry may further delay the auction of for 3G spectrum, vital for next-generation telecom services such as video-calling and broadband internet on mobile phones.

The auctions were earlier scheduled to be held on January 16, but was postponed to 30th of the same month as the Cabinet clearance on some of the key proposals regarding the auctions.

ET has learnt that Economic Affairs Wing of the fin min has now asked the Department of Telecom (DoT) to double the reserve price for the 3G and WiMAX radio frequencies and then submit it for Cabinet approval.

As per existing regulation, if the government were to make any changes to the policy, it would have to be sent back to sector regulator Trai.

The regulator in turn has 15 days time to respond.

If the government decides to follow protocol, the 3G auctions cannot take place on January 30 as scheduled.

The industry also fears that if the auctions were to be delayed beyond February 09, it may happen during the UPA regime as the code of conduct for the general elections are likely to kick in from March 2009.

The communications ministry plans to allow a maximum of five players per circle for 3G services, while for WiMAX, it has proposed that the auctions be restricted to only four operators in a zone. As per the fin min proposal, the government will rake in a minimum of Rs 28,280 crore from the 3G and WiMAX auctions.

Industry executives said that the primary reason behind the fin min demand was the poor response to the recent 3G pre-bid conference by new firms, including foreign players.

While DoT has allowed foreign operators to participate in the 3G auctions, most international players have indicated that they are likely to give it a miss.

Global operators have also pointed out that the auction guidelines have been structured to favor only existing Indian operators and have sought several changes to the country's 3G policy.

If foreign players who were expected to bid aggressively in the 3G and WiMAX auctions were to stay away, the government would fall short of its target of getting Rs 40,000 crore by a long margin. But, with the minimum price being doubled, the auctions may fetch the targeted revenues.

If the fin min's demands are accepted, this would mark the second instance of the government doubling base price for 3G and WiMAX radio frequencies. Telecom regulator Trai had initially recommended that the base price for 3G spectrums (pan-India) be fixed at about Rs 1,100 crore and that for BWA technologies be about Rs 500 crore.

But, the communications ministry, in its 3G policy announced in August 2008 had doubled the reserve price to Rs 2,020 core for 3G and Rs 1,010 crore for WiMAX spectrum.

Executives with two leading telcos confirmed that the industry was aware of the fin min's latest demand. Another executive from a telecoms industry association said the union Cabinet was likely to discuss the fin min proposal on Friday, but this could not be independently verified by ET.

Contradicting this, an official in the communications ministry said that Cabinet would take up this issue on January 8 as telecom minister A Raja would not be able to attend Friday's meet.

They are pissing off the potential bidders right when the companies themselves are in a tight spot during the economic turmoil.

[Honest 836]

3G auctions likely to miss date yet again

Economic Times l 3 Jan l New Delhi

The communications ministry is likely to defer the auctions of 3G spectrum yet again. This is because the law and commerce ministries, besides some other sections of the government, are likely to seek changes in the country’s 3G policy, an official in the communications ministry who did not wish to be named told ET.

Last week, the department of telecom (DoT) had announced that the auctions, which were scheduled for January 16, had been postponed to January 30, as the Cabinet has not yet approved some key parameters. But, executives with telcos as well as officials in the communications ministry admit that the auctions are most likely to be pushed to mid-February 2008.

“These ministries will send their suggestions by mid-next week and the DoT will have to prepare detailed replies to it before it can seek Cabinet approval for the auction process,” the communication ministry official said. This official also added that the Cabinet was unlikely to discuss the 3G auction before the third week of January: “After this, the DoT would require a fortnight to put in place the systems and processes required for the auctions,” the official added.

The proposals by the different ministries may further complicate the auction process. On Thursday, the finance ministry asked the telecom department to double the floor price for pan-India 3G spectrum to Rs 4,020 crore and that for Broadband Wireless Access technologies such as WiMax to Rs 2,020 crore.

The Cabinet may also have to do a balancing act as some ministries, including the Planning Commission, do not want changes to the current 3G policy. The Department of Industrial Policy and Promotion and the ministry of IT also want the auctions to go ahead as scheduled, another official in the communications ministry said.

When asked on the DoT’s response to the finmin proposal, this official said that department would ask the Cabinet to take a final call on the base price: “Our stance is to go with the existing policy, but the final decision rests with the Cabinet”.

Industry observers and analysts say that the primary reason behind the finance ministry’s move was the poor response to the recent 3G pre-bid conference by new firms, including foreign players, who feel that the auction guidelines have been structured to favor only existing Indian operators.

The absence of foreign players, who were expected to bid aggressively, could result in the government falling short of its target of getting Rs 40,000 crore. The doubling of the minimum price, on the other hand, would ensure that the downside is protected incase telcos choose to put in conservative bids.

[Honest 836]

Telecom players want 3G auction on time

Business Line l 2 Jan l New Delhi

‘Delay will give BSNL, MTNL undue advantage’.

The GSM operators have told the Government that the 3G roll out plans of State-owned BSNL and MTNL should also be put on hold if there is any further delay in conducting the auctions.

Both the PSUs have been given spectrum already and are gearing up for launching its 3G mobile services by February.

Mr T. V. Ramachandran, Director General, Cellular Operator’s Association of India, said, “As it is the two operators are getting a 6-month lead over the private players and any further delay will give them an unfair advantage. The Government should not postpone the 3G auctions. All existing GSM operators are keen to participate in it.”

The Department of Telecom had earlier announced that it will conduct the auction starting January 16. However, it has now been changed to January 30 on the ground that certain important decisions required Cabinet ratification.

Meanwhile, the Finance Ministry has suggested the doubling of the base price from Rs 2,020 crore to Rs 4,040 crore for 3G spectrum.

CCEA meeting

Senior DoT officials said that a decision on the new proposal from the Finance Ministry will be taken by the Cabinet Committee on Economic Affairs, which is expected to meet on January 8. Sources said that DoT is gearing up for conducting the auction on January 30 unless the Cabinet decides otherwise.

Barring a few companies, most of the industry wants the auction to take place without any further delay.

Mr Parag Kar, Senior Director, Government Affairs, Qualcomm, India and South Asia, said, “Rolling out 3G is executing the next phase of telecom reforms and hence the urgency. Without 3G, consumers will be deprived of better voice quality and value-added services such as mobile broadband, entertainment, commerce, and livelihood services that 3G will offer. 3G will enable operators in arresting falling average revenue per user, decongest 2G networks, and help increase broadband tele-density."

Flexi bizs models

To partly address the issue of credit crunch due to the economic slowdown, equipment vendors such as Nokia Siemens and Ericsson are offering flexible business models to operators in a bid to cut down on the capital expenditure on setting up a 3G network.

“We are already in discussions with operators in formulating innovative business models. Our efforts are to reduce the capital expense as much as we can. 3G auctions should be completed at the earliest if the Government wants to achieve its broadband targets,” said Mr Randeep Raina, Head 3G India, Nokia Siemens India.

Mr P. Balaji, Vice-President, Ericsson India, said, “India will miss out on the advantages of 3G such as e-medicine and e-education. 3G will also boost the software sector as a whole host of applications will have to be developed.”

[Honest 836]

DoT may endorse FinMin view on doubling reserve prices for 3G

Press Trust of India l 4 Jan l New Delhi

Under pressure to charge market driven price for spectrum, the Department of Telecom may finalise the higher reserve price for 3G services at Rs 4,040 crore for pan-India allocation, as recommended by the Ministry of Finance.

Sources in the know said that DoT is considering the increased reserve price for 3G services as it was also recommended by the telecom regulator TRAI that any allocation of spectrum in the future should be in accordance with the market forces.

The DoT, however, has left the final decision on prices to the Cabinet.

As per the guidelines for 3G services, DoT has proposed to allocate two blocks of spectrum of five MHz each to all the successful bidders, who would be participating in the auction of spectrum slated for January 30.

The industry remained a divided lot with some supporting the 100 per cent hike in reserve price for 3G spectrum, while others opposing any change at the last minute just days before the auctioning process begins.

Since DoT had allocated 2G start-up spectrum of 4.4 MHz along with the licence at Rs 1,658-crore for all-India, one of the mobile operators justified the reserve price of Rs 4,040 crore for five MHz of 3G spectrum.

DoT had taken a decision not to auction 2G spectrum as TRAI had recommended against it, saying any hike in prices for it would favour the existing GSM operators who have been given radio frequency at the same price as late as in May 2007.

Asked by when DoT would take the matter on 3G prices to the Cabinet, sources said comments from other concerned ministries were expected in another 3-4 days and by the end of this week the Telecom Commission may finalise its views on the subject.

[vmsanghrajka 0]

3G services bidders are anxious over auction rules, lack of time

New Delhi: In less than four weeks, the Union government is scheduled to hold an auction to sell spectrum rights for the so-called third generation (3G) mobile phone services. But neck deep into preparation for the auction, the country’s most ambitious such effort in at least a dozen years, some potential bidders say they are grappling with the lack of clarity in bid rules and the paucity of time.

A 3G phone service provides data access at speeds faster than those supported by mobile phone service technologies currently deployed in the country, such as CDMA (code division multiple access) and GSM (global system for mobile communications).

The auction of spectrum rights is scheduled for 30 January. Companies such as AT&T Inc., Deutsche Telekom AG, Qatar Telecom Ltd, Verizon Wireless and Sistema JSFC among several other global phone firms, have expressed interest in entering India’s mobile phone services market—the world’s second ranked and fastest growing by customers—and could be potential bidders in the 3G auctions, though this has not been independently verified.

One of the major concerns that potential bidders have is that the government has not given operators enough time to prepare. “The slots for 3G spectrum and their availability in which circles were announced only in mid-December and they want to hold the auction in January. Especially at a time when most foreign operators are running on skeletal staff due to the Christmas and New Year holidays,” said a senior executive at an international phone firm, on condition of anonymity.

This executive pointed out that even this week, the government’s finance and communication ministries had not agreed on what the reserve price for the auctions should be. The finance ministry wants it to be doubled to Rs4,040 crore, a request that has been turned down by the department of telecommunications (DoT). Such a change so close to the auction date will throw his firm’s bid preparations out of gear, this executive said.

A second criticism is that the government, for the first time, plans to charge separately large amounts for a phone service licence and spectrum rights. DoT has said it intends to charge Rs1,651 crore just for the licence and 3G aspirants will have to separately bid for spectrum—a number that the government has said could net the exchequer at least Rs30,000 crore.

“This means that a successful bidder has to pay for 3G and then has to pay another $400 million (nearly Rs1,950 crore) for the (unified access service licence, or UASL)... They will pay $400 million for a piece of paper,” said Mahesh Uppal, a director with Com First (India) Pvt. Ltd, a New Delhi-based consulting firm. This payment will hurt those players who want to get into current day second generation (2G) phone services, but will have no visibility on spectrum despite paying the licence fee.

“There are hundreds of pending 2G applications with DoT; there is no chance that new UASLs will come with any 2G spectrum,” Uppal added.

The global economic slump, too, weighs on the sentiment. “The recession has had very little impact on the telecom sector, but there is a cautious attitude that many companies have adopted towards spending, which may lead to fewer bidders,” said an executive with a leading Indian phone firm.

Another major concern is the lack of clarity on the provision of additional spectrum. “For 2G, there is a clear route map based on subscriber-linked criteria for allocation of additional spectrum when needed. But for 3G, there is no route map,” said the executive with the foreign telecom firm quoted earlier.

Clarity is also required on roll-out obligations. “The roll-out obligations say that 50% of district headquarters have to be covered and 15% of the short distance charging areas (SDCA, or areas covered by major exchanges) have to be covered. Now every DHQ (district headquarters) has SDCAs and are by default covered,” a third industry executive said on condition of anonymity.

Lastly, there is lack of clarity on the ability of 100% foreign-owned companies to operate beyond the bid if they end up successful. Indian telecom rules restrict foreign ownership at 74% and overseas firms will have to find a partner for the remaining 26%, for which some complain the stipulated 90-day period might be too short.

Still, there are those that believe that these issues are being blown up out of proportion.

“There is no issue with time given as the ministry of telecommunications issued the information memorandum on 12 December, which was well before the pre-bid conference (on 23 December),” said T.V. Ramachandran, director general of industry lobby Cellular Operators Association of India. “3G has already been delayed and India is lagging behind more than 100 countries that have already launched 3G services. It cannot be delayed anymore.”

On the yet unanswered queries, a DoT official said, “We are in the process of answering all the queries and will soon come out with all the necessary clarifications.” This official did not want to be identified.

Source: http://www.livemint.com/2009/01/07225015/3...anxiou.html?h=B

[Arun 795]

India’s 3G auction looks shambolic

Thu, Jan 8 2009. 9:51 PM IST

Live Mint

Red tape and bureaucracy may be accepted as part and parcel of doing business in India, but the handling of India’s much-heralded third generation, or 3G, auction looks particularly shambolic. Delays, confusion over eligibility and an 11th hour proposal to double the reserve price are marring the effort to sell 3G technology licences in the world’s fastest growing mobile market.

India is already slow in getting to 3G. The dominant operators—Bharti Airtel Ltd, Reliance Communications Ltd, Vodafone Essar Ltd and Idea Cellular Ltd—are anxious to get started. The government isn’t making it easy. The rights auction has already been delayed by two weeks, and a spat over the reserve price for each national licence threatens to make the wait even longer.

The government claims it is confident that the auction will add as much as $8 billion (Rs38,880 crore) to its deficit-challenged coffers. But the finance ministry wants to double the minimum reserve for each licence to guarantee it gets a good sum. Politicians are anxious to repeat the early 2008 underpricing of 2G licences. Since then, local start-ups Unitech Wireless Ltd and Swan Telecom Pvt. Ltd have sold stakes in their companies to foreign players for up to six times the original amount at which the licences were won.

Upping the reserve price may be sensible, but should have been suggested months ago. India’s government is now struggling to win approval for the change. Bidders expect the auction could easily be delayed again until mid-February—and privately describe the process as incompetent. If the auction isn’t held within the next two months, it’s unlikely to happen until well after the country’s national elections expected in April.

Fortunately for the government, India’s existing mobile operators are expected to bid regardless of auction delays. But the disarray is enough to deter the new foreign entrants the government hoped to attract.

Selling 3G licences in India should have been easy, but this shambolic debacle simply reinforces the country’s reputation as a painfully hard place to do business.

[Arun 795]

India's 3G, WiMax rollout may be pushed to 2010

ZDNet Asia

Friday, February 20, 2009 03:31 PM

Although Telecommunication Minister A. Raja this week said it is possible to hold auctions for India's 3G spectrum by Mar. 31, experts doubt the current government will proceed with haste in this realm.

Nupur Singh Andley, senior research analyst for connectivity at Springboard Research, told ZDNet Asia in a phone interview: "It is doubtful that the private players will roll out 3G services within the next eight months. In fact, we may see the roll out of 3G and WiMax only in 2010."

Naveen Mishra, communications research analyst at IDC India, concurred: "We expect the launch of 3G and WiMax services by private operators to get pushed to at least the last quarter of 2009."

While the government were given 3G airwaves to state-owned telecom operators--Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL)--the launch of 3G and WiMax services by private players has been delayed.

In January, the Cabinet referred the proposal to auction 3G and BWA (broadband wireless access) spectrum to a group of ministers, thereby delaying the bid indefinitely. This was prompted by differences of opinion among ministries over the base price for the auctions and number of licenses to award.

While the Department of Telecom had set the base price for the pan-India 3G spectrum at US$406.6 million (INR 20.2 billion) and for the BWA spectrum at US$203.3 million (INR 10.1 billion), the finance ministry had demanded the floor price for both be doubled. The issue became further complicated when the Planning Commission, the Department of Industrial Policy and Promotion, and the IT ministry opposed moves to double the base price.

Mishra told ZDNet Asia in an e-mail interview that although leading telecom operators already ran trials of 3G services, they would need about six months from the allotment of the 3G spectrum to offer these services. This time lag is because telecom operators have not placed orders for 3G network equipment, which takes around six months to procure. Given the uncertainties over the auction, operators do not want to take risks and will place orders only after the auction.

Delay can hurt growth

Despite the global recession, the Indian telecom market has been growing at a fast pace of 50 percent per annum. India added 113.26 million new customers in 2008, taking the total number of mobile subscribers to around 350 million by end-December. India also added over 2.3 million broadband connections in 2008, registering a growth of more than 74 percent.

The market growth is happening on the 2G platform, even as 120 countries across the world have already migrated to 3G.

D. K. Ghosh, chairman and managing director of ZTE Telecom India, told ZDNet Asia in an e-mail: "It would be naive to expect the Indian telecom industry to keep following the growth trajectory, despite other industries facing the recession. If the current market scenario continues for another year or more, we might see the negative effects on the telecom industry."

Springboard's Singh Andley said: "Delay in spectrum allocation is demoralizing the sentiment, especially for international investors."

According to Ghosh, both 3G and WiMax technologies have the potential to put a virtual PC with a broadband connection in the hands of over 350 million mobile users in the country.

Industry reports estimate that a 10 percentage rise in mobile usage can lead to 0.5 percent increase in GDP (Gross Domestic Product). "Going by this estimate, the gains each year for India, which is already a trillion-dollar economy, could be as high as US$50 billion," Ghosh said, adding that the rapid adoption of 3G can solve the twin problems of low broadband and PC penetration.

"The delay [in the launch of 3G and WiMax services] has been hindering the growth of not just the telecom industry but also the country," he said.

Mishra concurred, noting that any delay in launching this aspect will result in India lagging behind global markets where people are already consuming such services. As voice tariffs in India are one of the lowest in the world, operators would like to launch value-added services to sustain and improve their current ARPU (average revenue per user) levels, he said.

Competing wireless technologies?

Last month, the WiMax Forum, which certifies and promotes interoperability between broadband wireless products, launched its Global Roaming Program that lets operators and vendors easily obtain information required to establish WiMax roaming services. This has raised questions on whether 3G and WiMax technologies are complementary to each other or will compete over time.

In India, companies such as Tata Communications, Intel, BSNL and Reliance Communications, are proponents of WiMax and most of the companies have already done beta-runs of the technology.

Mishra noted that not all telecom operators in the country will win 3G spectrum licenses, and some of them "will have to bank on bagging BWA spectrum licenses, which will allow them to offer mobile WiMax services". He added: "3G and WiMax would compete with each other."

However, most experts believe WiMax and 3G technologies can coexist.

Raghu Prasad, Oracle's Asia-Pacific and Japan communications senior director of business transformation, said in an e-mail interview: "It is very likely that in a diverse market such as India, both 3G and WiMax will find their pockets of use and influence."

Singh Andley said: "While the advent of 3G will help in the growth of e-medicine, e-government, e-health, m-commerce and e-learning, WiMax will increase broadband connectivity, especially in India's rural areas."

The Telecom Regulatory Authority of India is banking on both 3G and WiMax to increase the country's broadband penetration, setting a target of 20 million broadband connections by 2010, up from the current 4.3 million connections.

Ghosh said: "The industry is expecting both WiMax and 3G to bridge this gap."

[KumaarShah 143]

Congrats, GoI. Great move, GoI.

Great and Superb news. So we will enjoy 3G maybe in 2012 or 2020 when the world would have moved to 6G or maybe 10G. Till then we all can enjoy EDGE/ GPRS etc from the existing operators.

It may be plausible that the GoI has developed cold feet after halving the estimates from 40k crores to 20k crores for 3G licences and hence they do not want to start now.

One more hing I fail to understand, if TATA is able to brazenly introduce 3G / HSIA by way of Photon, what is RCOM doing? Sleeping or scared of introducing it?

[santhoshavanoor 7]

Whats happening in India? This is really not good...

GoI should want to think about future, not backwars. Your are right Kumar bhai, 2020 we can get 3G. Be passion. A negative impact from our Government.

[kshah 452]

Frankly, I have stopped reading an thing about 3G in India. Operators and Government, every one wants to delay. Operators do not seems to be confident of getting enough revenue from 3G and government wants huge chunk of flesh from revenue and I think babus also might be wanting great amount of money too under the table.

[gmkarthikeyhan 2]

will be the 3G services only for GSM and not for CDMA... ?

Does the CDMA services can be upgraded..... If it is so upgraded to wat..??????

[Arun 795]

Probably operators may opt for 3G on GSM as all operators have GSM licenses now. The 3G upgrade path for CDMA is EVDO Rev 0 > Rev A

[gmkarthikeyhan 2]

Probably operators may opt for 3G on GSM as all operators have GSM licenses now. The 3G upgrade path for CDMA is EVDO Rev 0 > Rev A

Is reliance is upgrading its network to EVDO

[Honest 836]

Probably operators may opt for 3G on GSM as all operators have GSM licenses now. The 3G upgrade path for CDMA is EVDO Rev 0 > Rev A

Is reliance is upgrading its network to EVDO

Yes my dear friend, in their DREAMS only.

[Sadikk 301]

Reliance launching 3G for DATA only within month from now in all circles.

But tariff is expected to be very costly.