India's 3G Auction Delayed Again, Minister Says

India's auction of 3G and WiMax licenses is likely to be delayed again until next year, the country's minister for communications and IT said on Monday in Geneva, according to media reports.

The auction should be completed by the end of the Indian fiscal year, which ends on March 31, said A. Raja, the minister. He did not specify a date.

The auction, originally scheduled for January, was postponed after a dispute within the government over the starting bid for the licenses. The government then rescheduled the 3G auction for Dec. 7, with an auction for WiMax licenses scheduled to start two days after the 3G auction was completed.

The first sign of another delay came last month when the government did not release the revised information on the terms for the bidding, scheduled for Sept. 29.

The delay should not affect potential bidders since the market potential for 3G services in India is very large, said Sridhar T. Pai, CEO of Tonse Telecom, which researches the telecom market in India.

The Indian government expects to raise a minimum of 250 billion rupees (US$5 billion) from the 3G and WiMax license auction. This year, the government raised the minimum starting bids. A telecommunications company bidding for 3G licenses in India's 22 service areas will have to pay at least 35 billion rupees rather than 20 billion rupees under the former starting bids.

Both multinational and local companies are allowed to bid, but foreign companies can only hold a maximum of 74 percent of the total equity of the service company.

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