3G auction next year, to fetch Rs 20,000cr

It is 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 today, the government has talked of 3G auction only in 2009-10.

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

According to the 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, which is more than twice of what it expects to earn in 2008-09 at Rs 13,174.29 crore.

The Department of Telecommunications has prepared a draft note for the cabinet on 3G auction, which recommends hiking the base price for each block of a pan-India licence from Rs 2,020 crore to Rs 4,040 crore.  However, the cabinet has still not taken a final decision to clear the auction which was earlier expected to be completed by 30 January 2009.
  
The cabinet note had set a new deadline of end-March. However, 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 in an unprecedented financial crunch.