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India to Press Go Button on 3G Sale
(26 Nov 2008, BWCS Staff)The Indian government has chosen NM Rothschild and Sons to oversee the coming auction of 3G mobile phone licences in the country. The eagerly awaited spectrum sale will begin within "two to three days" and should be completed by the 15th of January, the Indian Communications and Information Technology minister A. Raja said yesterday.
Interest is high in the auctions, particularly as India is now, officially, the world's second largest mobile market, after China and the world's fastest growing wireless market. Last month, the country saw 10.42 million new mobile customers sign up with the existing operators, while China added "only" eight million.
Some operators had expressed concern that the auctions would be going ahead in the current financial climate. In October of this year, Vodafone apparently wrote to the Department of Telecoms in India to say that "mobilizing financial commitments in the current economic environment is proving difficult." The government however has pressed on regardless, despite Vodafone's warnings.
Vodafone took over Hutchison Essar, India's fourth largest mobile operator in a US$10.9 billion buy-out in May 2007. According to press reports in India, the mobile operator's spokesperson on emerging markets has said that an auction in early 2009 would have made more sense.
Numerous regulatory and financial delays have meant that the 3G sale in India has been held up several times already. Estimates made prior to the recent financial crisis indicated that the sale could raise as much as US$10 billion for state coffers.
State-run telcos Mahanagar Telephone Nigam Ltd (MTNL), which offers its services in Delhi and Mumbai, and Bharat Sanchar Nigam Ltd (BSNL) which operates in the rest of the country, have already been allotted frequency spectrum for 3G mobile phone services. However, the two companies will be forced to pay the government amounts equal to the highest qualified bidder among the private players.
Bharti, has already sought bids for building its 3G network from suppliers such as Ericsson and Nokia Siemens Networks and says it may start the services as early as the fourth quarter of 2009. In August of this year, the government in India said it may allow as many as 10 operators to offer high-speed wireless services to spur competition.
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