Government aims to get Rs 48,000 crore from 3G auctions

Government wants to begin another 3G spectrum auction soon. Communications Minister Kapil Sibal has told TOI that the Department of Telecom (DoT) is in talks with the Defence Ministry to free the spectrum in 2,100 MHz band. He further said that they are trying to sort out the matter.

The 3G spectrum sale could bring in relief for the cash-strapped government which is facing issues like fiscal and current account deficits. It is believed that if the military vacates the 3G spectrum–2 x 2MHz of the higher frequency–it could help the government get around $8 billion which is approximately Rs 48,000 crore by auctioning the four slots.

Telcos awaiting 3G auctions (Image credit: Getty Images)

Sibal said that the ministry wants to auction all the spectrum they have. However, the 3G auctions may not be possible soon due to the upcoming 2G auctions slated for January. According to a note by the Finance Ministry, 3G spectrum sale will bring in higher revenues than the overall 2G auctions (900 MHz and 1,800 MHz bands). The note also reveals that the defence forces could be allotted spectrum in the 1,900 MHz band in return of the 3G (2,100 MHz) spectrum they vacate.

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The report also suggests that convincing the Defence Ministry to vacate the 3G spectrum is an uphill task, say industry analysts. The Defence Ministry is already unhappy as there is no progress on the dedicated optical fibre network (OFC) that was promised to it earlier. The Department of Telecom had to provide the fibre network built by BSNL, at a cost of Rs 10,000 crore. Moreover, it was in lieu of the spectrum vacated by the Defence Ministry earlier. On the other hand, telcos aren’t happy as the deadlock between the ministry and DoT has been delaying the 3G spectrum sale.