FM wields deficit stick on 3G bid

Finance Minister Pranab Mukherjee has asked Communications Minister Andimuthu Raja to complete the auction of the third generation (3G) spectrum within the agreed deadline (February 15), so that the revenue from it can be reflected in the Union Budget for 2009-10. Mukherjee had earmarked Rs 30,000 crore as revenue from 3G auction, which has already been delayed by a year, in the Budget.

The finance minister, who is the chairperson of the Empowered Group of Ministers (EGoM) on 3G has also said that the Department of Telecommunications (DoT) can auction slots simultaneously, ranging from three to four (includes the slots allotted to BSNL/MTNL), depending on their availability in various circles. It is expected to be over by February 12.

Confirming the development, a senior government official said: “Raja has been informed by the finance minister not to delay further the auction to ensure that the government can include the revenue earned in this financial year.”

Earlier Raja had asked Mukherjee about the outcome of the decision of EGoM on the exact number of slots available after the spectrum battle of DoT with the Ministry of Defence. DoT cleared the path for four slots (including one allocated to BSNL/MTNL) late December last year. DoT said that the Ministry of Defence (MoD), which had to vacate 25 Mhz (along with a slot comprising 5 Mhz) of spectrum, refused to do so within the time of the auction.

The defence ministry took the stand that it would be able to release spectrum only for three slots (it gave two and the third would be available in July-August) to private operators, and the fourth would be vacated in 2013.

EGoM said the successful bidders could start operations by September 1. A difference of opinion between DoT and MoD derailed the fifth EGoM meeting last week. It was neither able to take a decision on the auction deadline nor finalise the notice of application for prospective bidders.

Raja said another meeting would take place soon to resolve the differences.

This led to the speculation that the 3G auction may be postponed for the next financial year. It would be a victory of sorts in a way for the lobby of telecom operators who are keen on postponing the auction as, either they do not have the money or are rolling out 2G network, which they want to consolidate.