Spectrum crunch may force the government to allow only three private operators to offer 3G services in a circle and said that successful bidders will have to make 100 per cent payment by March 10.
Even the empowered Group of Ministers (EGoM), headed by Finance Minister Pranab Mukherjee, in its last meeting had taken a decision to this effect, says minutes of the meeting.
This would mean that the government may not get the targeted Rs 25,000 crore from sale of radio waves needed for third generation telecom services in case only three blocks were auctioned.
According to the minutes of the EGoM meeting, held on December 21, 2009, "DoT will auction 3 or 4 blocks each of 2x5 MHz of 3G spectrum pan-India (excluding one block assigned to BSNL/MTNL) subject to availability of spectrum."
Immediately after the EGoM meeting, Telecom Minister A Raja had announced that four blocks of 3G spectrums would be auctioned.
On the issue of payment to be made by the operators, the DoT has cleared the air that the successful bidders would have make entire payment of 3G spectrum by March 10 and in case of WiMax by March 20 this year (within current financial year).
The government has fixed reserve price for 3G spectrums at Rs 3,500 crore for pan-India and Rs 1,750 for WiMax services. DoT is likely to issue Notice Inviting Applications (NIA) on January 10 start the auction of 3G spectrum on February 12 and complete the process on March 5, 2010.
The DoT has already got 10 MHz of spectrum from the defence and five MHz will be released by March 31 and another five MHz by August this year. This makes total 20 MHz of radiowaves available with DoT.
Out of this one block has already been given to BSNL/MTNL leaving spectrum sufficient for three players only.
"All the blocks of 3G spectrum to be auctioned would be allotted to the successful bidders immediately after auction and assigned for use from August 2010 simultaneously," the EGoM minutes said.
Raja could not be contacted for his comments.
On the payment issue, DoT officials said that the bidders would be asked to deposit 25 per cent of the bid amount by February 28 and the balance by March 10 in case of 3G and for the Wimax spectrum the schedule is 25 per cent to be paid by March and the remaining by March 20.