India to Auction 3G Licenses in Three Months

A specially constituted group of ministers in India has targeted Indian rupees 250 billion (US$5 billion) as the minimum revenue from a proposed auction of 3G and WiMax licenses in the country, according to media reports.

India's Minister of Communications, A. Raja, told reporters in Delhi on Thursday that the auction would be completed within 90 days, but did not cite a specific date for the auction.

The auction, originally scheduled for January, was postponed after differences within the Indian government over the minimum cost of the licenses.

The Ministry of Communications will license four slots for 3G in each of India's 22 service areas, with a fifth slot reserved for two government-run telecommunications companies.

The companies Bharat Sanchar Nigam and Mahanagar Telephone Nigam were allotted 3G spectrum ahead of the auction and have started offering services. The government said last year that they would pay license fees equal to the highest bid in each service area.

Under the new rules finalized by the group of ministers on Thursday, a telecommunications company bidding for 3G licenses in all 22 circles will have to be willing to pay at least Indian rupees 35 billion. Similarly, a bidder for WiMax licenses will have to pay at least Indian rupees 17.5 billion.

Raja said he expected that the government would be able to raise way beyond the minimum price in the auction, because fewer slots were on offer.

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