In a move that could provide the government a fiscal boost, Communications Minister Kapil Sibal on Wednesday said a spectrum auction for fourth-generation (4G) mobile services was planned by the end of the year. 4G services enable data speeds many times higher than 3G.
The auction could fetch the government nearly Rs 13,000 crore for each 20-MHz block. That is the amount Finance Minister Pranab Mukherjee expected the government would get from the auction of each block of broadband wireless access (BWA) or 4G spectrum at the time of Budget 2011-12. Owing to a lack of spectrum availability, the auction was postponed.
With about six blocks of 4G spectrum expected to be available, the government could make Rs 52,000 crore if it sells four or as much as Rs 78,000 crore if it sells six. The number will be decided by the Department of Telecommunications (DoT).
“By the end of the year, we are actually going to auction 4G (spectrum). That is what our intent is. We have enough spectrum now to share with everybody,” Sibal said at the India Day function organised by his ministry at the Mobile World Congress being held in Barcelona, Spain.
The DoT has also made it clear the 2G auction directed by the Supreme Court cannot take place in four months and can be completed only by March 2013. The government can expect a substantial amount to be generated through that auction, too, in Budget 2012-13.
Apart from the six blocks identified, the state-owned BSNL recently returned BWA spectrum allocated to it. That may also come up for auction. In June 2010, the government had auctioned two slots of BWA spectrum, which had fetched over Rs 38,000 crore. Reliance Industries, through Infotel Broadband, was the only player to have taken a pan-India licence.
Sibal said the government did not want to put all the spectrum for auction in one go and the decision would depend on recommendations by the Telecom Regulatory Authority of India (Trai). "In fact, we don't think we are going to put all the spectrum for auction. That depends on what Mr Sarma (the Trai Chairman) does for us, the idea being we should come up with enough spectrum to get a reasonable price for ourselves," he said.
On the upcoming auction of 2G spectrum, Sibal said, "A lot of people are asking, will everybody be allowed to participate; in how much tranches will spectrum be sold; who will be allowed to participate? All these decisions will be taken hopefully in the next one month or so but in any case it will not take more than four months."