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UPDATE 1-India to hold global auction for 3G spectrum

Fri Aug 1, 2008 4:52pm IST
 
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By Devidutta Tripathy and C.J. Kuncheria

NEW DELHI, Aug 1 (Reuters) - India will hold a global auction of third-generation (3G) licences this year, offering foreign firms the chance to tap the world's fastest-growing wireless market and raising up to $9.5 billion for the government.

Five licences would be offered initially and possibly 10 in total, telecoms minister Andimuthu Raja said on Friday, for the next-generation services which give users fast Internet access, games and a host of multimedia content on their cellphones.

Current Indian licencees, such as Bharti Airtel (BRTI.BO: Quote, Profile, Research) and Reliance Communications (RLCM.BO: Quote, Profile, Research), and foreign firms like Vodafone (VOD.L: Quote, Profile, Research) with prior experience in 3G services could compete in the auctions for the 60 Mhz of available spectrum, which Raja expected to be completed by December.

The auctions could open up opportunities for international operators such as AT&T (T.N: Quote, Profile, Research) who have not yet got telecoms licences in the world's second-largest wireless market.

It will also spell opportunities for network gear makers such as Nokia Siemens [NSN.UL], Ericsson (ERICb.ST: Quote, Profile, Research), Motorola (MOT.N: Quote, Profile, Research), Huawei [HWT.UL], as successful bidders could spend billion of dollars building 3G networks.

One slot each in India's 22 telecom zones would be reserved for state-run firms Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) (MTNL.BO: Quote, Profile, Research).

Shares in telecoms firms rose on the news, with top mobile operator Bharti Airtel (BRTI.BO: Quote, Profile, Research) gaining as much as 3.1 percent and MTNL rising as much as 7.6 percent.  Continued...

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