Even as the Department of Telecommunications (DoT) is under pressure from finance ministry to complete the 3G auction process fast, UK-based mobile giant Vodafone, which operates in India through a joint venture with Essar group, has sought delay in the 3G spectrum auction due to global financial crisis.
In a letter to the DoT, the company said mobilising financial commitments in the current economic environment is proving to be an extended process orrowers could expect the process loan exercise to take three months to end with some banks taking in excess of one month to obtain their credit sanctions. This too guarantees no success.
“We are informed that many international banks will struggle if a financial commitment is required before the year-end. Therefore, scheduling the auction in early 2009 would avoid this problem and the European and US holiday season,” Neil Gough, director, public policy, emerging markets, Vodafone, said in the letter to DoT’s Joint Secretary J S Deepak.
A senior DoT official, however, said there is no decision yet on delaying the auction due to the financial crisis unless finance ministry thinks otherwise.
“In this environment we suggest that the department provides a very minimum of one month’s notice of the specific date of the auction and preferably longer,” Gough has said.
However, Vodafone did not specify what is early 2009 in terms of months. While the industry is facing a credit crunch, the ministry wants the auction for 3G to be completed quickly to raise funds for the government to address deficit financing issues.
The UK mobile major also wants the DoT to raise the External Commercial Borrowings limits to include all 3G spectrum expenditure without utilising the existing limits.
Last week the Reserve Bank of India had announced that telecom operators could raise as much as $500 million through the ECB route to bid for 3G auction.
Recently Telecom Minister A Raja said the auction is likely to be completed by January 15, 2009.
“The 3G auction would be completed by January 15 and the operators would have to pay up by January 31,” Raja had told reporters ruling out any change in the schedule.
Earlier the schedule was till December 31 but due to the festive season and Christmas holidays, there may be little bit of change in the timeline, he had said.
Finance Minister P Chidambaram had expressed concern over delay in auction process for the auction. Earlier, the DoT had said hinted towards reviewing the time schedule for 3G spectrum auction amid anticipation that foreign participation in the auction would be less than expected in the wake of global financial crisis.
“I have to discuss it with the finance minister whether the financial condition is conducive for an auction," Raja had said.
