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3G Services Indian companies to provide 3G Services - Auction progresses

New Delhi, April 9 (IANS) The first-ever auction of the radio frequency spectrum for third generation (3G) telephony that would facilitate high-speed mobile services in India began Friday, with five rounds completed in a single day.

As many as nine telecom companies -- Bharti Airtel, Reliance Communications, Vodafone Essar, Idea Cellular, Tata Teleservices, Aircel, Etisalat, S Tel and Videocon Telecommunications -- are participating in the online auction process.

Bharti Airtel, Reliance Communications, Vodafone Essar, Tata Teleservices, Idea Cellular and Aircel are bidding for all-India spectrum, while Videocon, S Tel and Etisalat are bidding only for selective circles.

According to the latest data available on the website of the Department of Telecommunications (DoT), the national capital received Friday the highest bid at Rs.373.29 crore, followed by Mumbai, Maharashtra, Gujarat, Andhra Pradesh, Karnataka and Tamil Nadu at Rs.362.66 crore.

Nine service areas witnessed negative demand. These were Bihar, Orissa, Jammu and Kashmir, Assam, Himachal Pradesh, West Bengal, Rajasthan, Haryana and the North East,

The government has fixed a reserve price of Rs.3,500 crore for 3G spectrum. It is a simultaneous auction of 22 service areas over a secure website on the internet.

The auction has multiple rounds. At each round, the price would be hiked from anywhere between 10-1 percent over the previous round's price depending on the demand.

The auctions will be held from 9 a.m. to 7.30 p.m. on all days, except Sundays and national holidays.

It will end only when the demand is equal to the number of slots available in each service area.

According to a senior DoT official, it is difficult to set a time-frame for the 3G bidding.

"It may be over in two weeks, but can also stretch for a month," the official said.

The bid data, including the winning companies' names, will be made public after the auction is completed. The winning firms will have to deposit the money within 10 days after the auction.

The successful bidders would be allowed to offer 3G services on a commercial basis from Sep 1.

The 3G telecom services will allow faster connectivity than what is available now and enable applications such as internet TV, video-on-demand, audio-video calls and high-speed data exchange.

According to the Notice Inviting Applications (NIA) issued in February, of the 22 telecom circles, five states - Punjab, Bihar, West Bengal, Himachal Pradesh and Jammu and Kashmir - will have four private players for the auction.

Other circles, including the four metros of Delhi, Mumbai, Kolkata and Chennai, will have three private players.

The number of slots up for grab exclude those allotted to state-run Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd, which were allotted licences last year and have since started offering 3G services in their operating circles. But they will have to match the price paid by the highest bidder in their zones.

The auction for broadband services will begin two days after the process concludes for 3G spectrum.

As many as 11 companies -- Bharti Airtel, Idea Cellular, Aircel, Augere Mauritius Limited, Infotel Broadband Services, Qualcomm, Reliance WiMax, Spice Internet Service Provider, Tata Communications Internet Services, Tikona Digital Networks and Vodafone Essar -- will bid for broadband wireless access (BWA) services.

The government has set Rs.1,750 crore as the base price for BWA spectrum.

The central government hopes to garner Rs.45,000 crore from these auctions.

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