3G Auction a Priority for India's Communications Minister

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India's auction of 3G licenses will be a priority, A. Raja, the country's minister of communications and information technology, told the Press Trust of India news agency on Thursday after he was sworn in to the post.

Raja did not specify a timeline for the auction.

The auction has been frequently postponed because of differences between the Ministry of Finance and the Ministry of Communications and Information Technology on the floor price for the auction. The Ministry of Finance favored an increase in the floor price to raise more revenue from the auction, according to sources.

Elections to the federal parliament, started in April, further delayed the auction.

Raja, who was minister of communications and information technology before the elections, was sworn in again on Thursday after the United Progressive Alliance (UPA) government was re-elected this month.

No longer dependent on communist members of parliament for its majority in parliament, the government of Prime Minister Manmohan Singh is expected to push through economic reforms in a number of sectors, including communications.

The communications ministry announced in December plans to auction 3G licenses and spectrum by January 16. Both Indian and foreign bidders were to be allowed to bid, though the foreign winning bidders would be limited to a 74 percent stake in companies operating 3G services.

One block of spectrum in each of the service areas was reserved for use by two government controlled telecommunications companies -- Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL). However, the government said that these companies would have to pay license fee for the spectrum at the highest bid in each service area.

In addition, the government allocated spectrum to the two companies that have already introduced 3G services in some parts of the country.

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