Govt misses date with bumper revenue harvest

TELECOM: 3G spectrum to be auctioned only in next financial year.

It’s official now. The much-awaited auction of third-generation (3G) spectrum, essential to launch high-speed value-added mobile telephony services, will not happen this financial year. In the Interim Budget presented on Monday, the government has talked of 3G auction in 2009-10.

It has estimated that it will get around Rs 20,000 crore from the auction. This is much lower than the earlier projection of the government that it will be able to garner over Rs 30,000 crore by auctioning five 3G licences. The estimate seems to have been cut due to the economic slowdown.

According to the Interim Budget documents, the government expects to earn Rs 33,335.33 crore from various licence fees and spectrum charges (primarily from 3G auction) in 2009-10. This is more than twice the 13,174.29 crore it hopes to earn in 2008-09.

The Department of Telecommunications’s draft note for the Cabinet on the 3G auction recommends raising the base price for each block of a pan-Indian licence from Rs 2,020 crore to Rs 4,040 crore.

However, the Cabinet has still not taken a final decision on clearing the auction process, which was earlier expected to be completed by January 30, 2009. The Cabinet note set a new March-end deadline. The Cabinet Committee on Economic Affairs is still deliberating on the note and many incumbent telecommunication service operators have opposed the auction as they find themselves facing an unprecedented financial crunch.