The Hindu : Business : No auctioning of 2G spectrum to new players

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Thursday, Dec 13, 2007
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No auctioning of 2G spectrum to new players

Special Correspondent

$20 b will be invested in IT, telecom sectors by 2010

To maintain level-playing field
3G to be allocated on an auction basis

— PHOTO: V. V. KRISHNAN

SPECTRUM CONUNDRUM: Prime Minister Manmohan Singh lighting the traditional lamp and inaugurating India Telecom 2007 conference in New Delhi on Wednesday. Union Minister of Communications and Information Technology A. Raja (second from left), Minister of State Shakeel Ahmed (left) and Habil Khorakiwala, President, FICCI, look on.

NEW DELHI: Ruling out auctioning of 2G spectrum to new players, Union Communications Minister, A. Raja, on Wednesday said this was important so as to maintain a level-playing field between the new and existing service providers.

“We cannot adopt the auctioning route for existing 2G spectrum due to legal barriers. But for the next generation mobile services (3G), the Government has already announced a policy that frequency will be allocated on the basis of auction,” he told newsmen on the sidelines of India Telecom 2007 meet.

The case of suo motu bids by Bharti Airtel followed by Idea Cellular for 4.4 MHz additional spectrum had raised speculation that whether the Government would consider this as a policy regime. Bharti had on Monday offered Rs. 2,650 crore reserving the right to increase the bid further, while Idea Cellular had written a letter to the Secretary, Telecom, D. S. Mathur about its willingness to participate in the bidding process.

Mr. Raja has maintained that auctioning of 2G spectrum would create a level playing field in favour of the existing GSM operators and thus any such decision might not stand legal scrutiny.

The Minister said spectrum needed to be allocated on the basis of real competition and in a transparent manner.

When asked how the Government would generate revenues as pointed out by the Prime Minister, Manmohan Singh, Mr. Raja said: “We already have annual licence fee based on percentage of adjusted gross revenue (AGR) and we are also going to auction spectrum for 3G services.”

About the investments in the sector, Mr. Raja said about $20 billion would be invested in the IT and telecom sectors by 2010.

“In telecom manufacturing, we have received commitments of over $2 billion and we expect fresh investment of $2 billion in the next one year,” he added. The decision of providing support from USO (Universal Services Obligation) fund for mobile telephony and broadband services would open up the vast untapped market in rural areas, he said.

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