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UPDATE 1-India 3G auctions to start from April 9
February 24, 2010 / 8:00 AM / 8 years ago

UPDATE 1-India 3G auctions to start from April 9

* March 19 deadline for submission of interest

* Govt hopes to raise $7.6 billion from the auction

(Adds details, background)

NEW DELHI, Feb 24 (Reuters) - India’s long-pending auction of third-generation wireless spectrum will start on April 9, the government said, in a project it hopes will raise more than $7 billion.

The government said in a statement on Wednesday that it would issue a formal notice inviting applications on Thursday and set a March 19 deadline for submissions of interest.

The auction was delayed by differences between government departments over pricing wireless radio spectrum and on the availability of spectrum to be auctioned, but officials said last week the issues had been resolved. [nSGE61F063].

The auctions would be held for 20 of India’s 22 telecoms zones and four slots are available for most of the zones. In some zones, such as Delhi and Gujarat, only two slots are available due to scarcity of available spectrum. The government has fixed a base price of 35 billion rupees

($760 million) for all-India spectrum, but bids are expected to come at much higher levels due to high competition and a paucity of spectrum in the world’s fastest-growing large mobile market.

Analysts expect each firm will need to spend between $1 billion and $1.5 billion to secure nationwide spectrum, and rolling out the high-speed networks could cost billions of dollars more.

The government has penciled-in expected revenue of 350 billion rupees ($7.6 billion) from the auction, which would help address a fiscal deficit on track to reach 6.8 percent of GDP in the financial year that ends on March 31.

    India’s leading telecoms firms Bharti Airtel (BRTI.BO), second-ranked Reliance Communications (RLCM.BO) and No. 3 Vodafone Essar (VOD.L) are keen to participate in the auction for all-India spectrum, while Telenor’s (TEL.OL) India unit has said it will bid in select zones.

    AT&T (T.N), which has been trying to get a foothold in India, could be a bidder while media have reported that Australia’s Telstra (TLS.AX) and South Korea’s SK Telecom (017670.KS) might also be interested.

    Broadband wireless access (BWA) auctions would start two days after the close of the 3G auction, the government said.

    (Reporting by Devidutta Tripathy; Editing by Tony Munroe)

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