The much-awaited auction of spectrum for third generation (3G) mobile services would be delayed by over a month and is likely to start by the end of February.

According to sources close to the development, the Department of Telecommunications (DoT) is working on the new timeline for the auction of frequency that would be issued shortly.

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The government wants to earn the revenues from the auction in the current financial year (2009-10), according to a DoT official. So, the new timeline for 3G auction was likely to be extended by over a month only as the whole auction process would take another month to complete, the official said.

DoT was expected to release notice inviting applications (NIA) on December 8, but it has been unable to do so because of uncertainty over vacation of spectrum by defence forces.

The defence ministry was supposed to release 25 MHz of spectrum by December 7, after the Cabinet approval for setting up of alternative optical fibre network for defence at a cost of Rs 9,175 crore. However, despite the approval on December 3, the ministry did not release the 25 MHz of spectrum, due to which DoT failed to release NIA on schedule.

The Empowered Group of Ministers decided at a meeting last week that the spectrum would be made available by August 2010, after which it would be allotted to the winners of 3G auction simultaneously to maintain a level playing field. It had also decided to auction four slots, besides the one each already given to telecom PSUs BSNL and MTNL.

The government has fixed a revenue target of Rs 25,000 crore from the auction. The reserve price for 3G spectrum has been fixed at of Rs 3,500 crore, while that for the WiMax (wireless broadband) services at Rs 1,750 crore .

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