The Indian government has fixed a reserve price of Rs.4,090.41 crore ($835 million) for each operator to take part in the 3G auctions in the country.
The country's finance ministry seems to have had its way after it asked the telecoms ministry to double the proposed price suggested last year of exactly half this amount, according to a report by the Press Trust of India news agency.
However, a Reuters report said the pricing and the rules of the auction could be announced in a week. The country's road to 3G policy has so far been on a controversial, delayed and tortuous path.
Two state-owned operators, the Bharat Sanchar Nigam Ltd (BSNL) and the Mahanagar Telephone Nigam Ltd (MTNL), have already been allowed to offer 3G services and have launched these services in some parts of the country. MTNL launched the services last December while BSNL did so in February of this year, giving both operators a head start over private operators who will have to take part in the auctions, now slated for mid-August.
BSNL and MTNL will each have to shell out the reserve price of Rs.4,090.41 crore ($835 million). This reserve price does not include the cost for using spectrum.
In addition to BSNL and MTNL, six private operators will be allowed to offer 3G services initially with this number likely to be increased at a later date.
Private players
The country's largest private operators, Bharti Airtel, Vodafone, Reliance Communications and the Tatas, are set to be the main contenders for offering 3G services along with a couple of new private sector players. Private overseas companies such as NTT DoCoMo are likely to take part in the 3G auctions through their local partners (in this case, the Tatas).
"The reserve price now fixed seems fair enough. I think it will mostly be the Indian private operators who will be bidding for the licences. 3G is a value, not a volume game and operators are unlikely to see returns proportionate to their investments. It will largely be the GSM subscribers now using EDGE (Enhanced Data Rates for Global Evolution) who are likely to go in for 3G services," said Deepak Kumar, head of communications research at IDC India.
Kumar said overseas private companies are not likely to be able to take part on their own. "They will not be able to roll out the huge networks that are required for 3G services (in time). If they take part in the bidding, it will be as partner of the Indian operators," he said.
Other analysts said not more than a few million subscribers are likely to subscribe to 3G services. For one thing, India's huge—and growing—wireless subscriber base is overwhelmingly dominated by pre-paid subscribers. A recent report from Gartner said pre-paid connections made up for as much as 93 per cent of the total subscriber base in 2008 and is set to rise to 96 per cent by 2013. Gartner also predicted that the Indian mobile subscriber base is set to exceed 77.1 crore connections by 2013, from 45.2 crore in 2009.
It is not known if the auctions for licences to operate WiMAX in India will also be held at the same time, as it was earlier stated. In this case too, the finance ministry had asked the telecoms ministry to double the reserve price for bidding from Rs.1,023.83 crore ($209 million).
The country's finance ministry seems to have had its way after it asked the telecoms ministry to double the proposed price suggested last year of exactly half this amount, according to a report by the Press Trust of India news agency.
However, a Reuters report said the pricing and the rules of the auction could be announced in a week. The country's road to 3G policy has so far been on a controversial, delayed and tortuous path.
Two state-owned operators, the Bharat Sanchar Nigam Ltd (BSNL) and the Mahanagar Telephone Nigam Ltd (MTNL), have already been allowed to offer 3G services and have launched these services in some parts of the country. MTNL launched the services last December while BSNL did so in February of this year, giving both operators a head start over private operators who will have to take part in the auctions, now slated for mid-August.
BSNL and MTNL will each have to shell out the reserve price of Rs.4,090.41 crore ($835 million). This reserve price does not include the cost for using spectrum.
In addition to BSNL and MTNL, six private operators will be allowed to offer 3G services initially with this number likely to be increased at a later date.
Private players
The country's largest private operators, Bharti Airtel, Vodafone, Reliance Communications and the Tatas, are set to be the main contenders for offering 3G services along with a couple of new private sector players. Private overseas companies such as NTT DoCoMo are likely to take part in the 3G auctions through their local partners (in this case, the Tatas).
"The reserve price now fixed seems fair enough. I think it will mostly be the Indian private operators who will be bidding for the licences. 3G is a value, not a volume game and operators are unlikely to see returns proportionate to their investments. It will largely be the GSM subscribers now using EDGE (Enhanced Data Rates for Global Evolution) who are likely to go in for 3G services," said Deepak Kumar, head of communications research at IDC India.
Kumar said overseas private companies are not likely to be able to take part on their own. "They will not be able to roll out the huge networks that are required for 3G services (in time). If they take part in the bidding, it will be as partner of the Indian operators," he said.
Other analysts said not more than a few million subscribers are likely to subscribe to 3G services. For one thing, India's huge—and growing—wireless subscriber base is overwhelmingly dominated by pre-paid subscribers. A recent report from Gartner said pre-paid connections made up for as much as 93 per cent of the total subscriber base in 2008 and is set to rise to 96 per cent by 2013. Gartner also predicted that the Indian mobile subscriber base is set to exceed 77.1 crore connections by 2013, from 45.2 crore in 2009.
It is not known if the auctions for licences to operate WiMAX in India will also be held at the same time, as it was earlier stated. In this case too, the finance ministry had asked the telecoms ministry to double the reserve price for bidding from Rs.1,023.83 crore ($209 million).
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