India To Release Five 3G Licenses

Updated Here
India is planning the launch of 3G networks, a little late but at least the country is going with established standards. The government is auctioning 5 licenses over 60 Mhz of spectrum by the end of the year, and may offer a further 5 licenses at a future date. The reserve price for the licenses is set at $476 million (20.2 billion rupees), and the government-owned telcos will automatically be awarded spectrum (but will have to pay for it at the level of the highest bid)…which I guess means they’re only auctioning three licenses. Foreign companies with “experience in 3G” will also be able to bid for a license. There are 22 telecom zones in India according to Reuters, and it seems they will be sold separately. MoneyControl notes that 3 of the slots will be allotted to CDMA players with the others going to GSM technologies, but it’s unclear whether that’s 3 of 5 licenses or 3 of 10 licenses. “(Telecoms minister) A Raja said that the rollout obligation of the 3G would be the same as that of the 2G spectrum. He further said that the 3G-spectrum fee is to be 1 percent of the adjusted gross revenue from the second year and there would be no annual spectrum fee for the 3G auction in the first year.”

Bloomberg has an interesting quote from the release: “Quality of voice telephony will be improved as 3G spectrum would enable service providers to provide good quality services to a larger number of subscribers”. No bragging about video calls here… and it makes sense. India is a large country with a high density of people, the biggest benefit of 3G is likely to be cheaper voice and text services. India also plans to allow number portability within six months of granting the licenses.