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New Delhi, Aug. 27 An empowered Group of Ministers on Thursday fixed the base price for pan-Indian 3G spectrum at Rs 3,500 crore. The reserve price for broadband wireless access (BWA) spectrum has been fixed at Rs 1,750 crore.

The Finance Ministry had suggested Rs 4,040 crore for 3G and Rs 2,020 crore for WiMax, while the Department of Telecom had suggested Rs 2,020 crore and Rs 1,010 crore respectively. The final base price decided by the eGoM is, therefore, midway between the two options.

The eGoM has, however, agreed with the line taken by the Finance Ministry as far as the number of slots to be auctioned is concerned. Only four private operators will get 3G spectrum and there will be three slots of WiMax spectrum on the block.

BSNL and MTNL have already been given spectrum for both types of services. DoT had wanted to auction all the available 3G spectrum. The GoM has also decided to auction one slot of 3G spectrum for CDMA players with a base price of Rs 875 crore.

Operators who win the 3G bidding will get a chunk of 5 Mhz spectrum and BWA players will get 20 Mhz. Only 1.25 Mhz spectrum has been earmarked for one CDMA player. The Government will get at least Rs 25,000 crore from the auctions, which is Rs 10,000 crore lower than what the Finance Ministry had accounted for in the Budget 2009-10. But with only four slots up for grabs, the Government can expect some aggressive bidding considering that there are least 6-7 players eyeing the 3G segment.

The bids in circles like Delhi could go really high since there are only two slots of 3G spectrum available.

Mr A. Raja, Minister for Communication and IT, told Business Line, “We expect to complete the auction within 90 days.”

Industry expressed disappointment with the policy announced. Both GSM and CDMA players said that base price was on the higher side and the eGoM should have stuck to the initial figure of Rs 2,020 crore for 3G spectrum. “We are disappointed. This will spoil the business case for operators,” said Mr T.V. Ramachandran, Director-General, COAI.

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