IN THE WINGS

New Delhi, July 1: The allocation norms for third-generation (3G) spectrum, which have been finalised by the telecom ministry, is awaiting the approval of the cabinet.

Telecom minister A. Raja has decided to auction 3G spectrum and allow foreign players to participate in the bidding, backed by the support from the finance ministry and the Planning Commission.

The Prime Minister’s Office (PMO) and the ministry of external affairs are also in favour of an international competitive bidding for 3G spectrum allocation.

The PMO contends that auctions are a more transparent way of determining a market price for a scarce resource such as spectrum.

However, with the Telecom Regulatory Authority of India (Trai) and a section of the department of telecom (DoT) wanting to restrict 3G licences to domestic players, the issue needs cabinet approval, said officials.

The decision to open the auctioning of 3G spectrum to international firms will allow global telecom players to enter the fast growing Indian market. Moreover, competition in the 3G space will bring down the cost of telecom services for consumers.

The global auctioning route will also add to the size of the government’s revenue kitty as it can receive licence fees in excess of Rs 21,400 crore in the very first year, estimate analysts.

According to the final policy, 3G spectrum will be auctioned in tranches of 5Mhz to each service provider winning a bid. The spectrum will be released in the 2.1-gigahertz band, which will make the service compatible with most countries, but not the US.