In a move that will speed up the proposed auctions of third generation (3G) spectrum, the key for telcos to launch high-end telecom services such as video-conferencing and high speed internet on the mobiles, the Cabinet is expected to take up the issue soon for discussions.
Communications and IT minister A Raja said on Wednesday that the Union Cabinet was likely to make a move on the issue within next two weeks. The minister met the Prime Minister earlier in the day and discussion between the two is understood to have focused on the 3G auction.
The communications ministry is understood to have prepared a Cabinet note with all the necessary details to go ahead with the auction and the same may be considered by the Cabinet soon. In case the Cabinet approves the ministry’s proposal in its current format, the 3G auctions can be held within couple of months of getting the clearance.
The Department of Telecommunication (DoT) and the finance ministry had earlier been on the cross roads with regard to the pricing of 3G spectrum. While the DoT had set the base price for pan-India 3G license at Rs 2,020 crore and that for corresponding CDMA platform WiMax at Rs 1,010 crore, the finance ministry wanted the base to be doubled to generate greater revenue.
The view of the finance ministry early in the year was that due to economic slowdown, enough number of players may not be available in the auction, resulting in poor pricing of the scarce spectrum, thus making a case for higher base price. However, the situation this time around is quite different. The telecom industry has shown convincingly its robust performance even in wake of the slowdown and the interest of both Indian as well as foreign players in the auction has only increased over time. Further, the outlook of both Indian as well as global economy too has improved considerably from what it was couple of quarters ago. Therefore, the finance ministry may now decide to leave the price discovery on market forces and let the DoT go ahead with the auction at already decided prices.