Costly calls

New Delhi, Jan. 13: The cabinet committee on economic affairs (CCEA) is likely to take up the issue of doubling the base price for third-generation (3G) spectrum later this week.

Earlier, the finance ministry had suggested that the minimum reserve price for a pan-India 3G licence be raised to Rs 4,040 crore from Rs 2,020 crore as “the market value of spectrum is much higher than what the department of telecom has put in the auction”.

However, the telecom ministry wanted to keep the price lower as it was apprehensive of garnering up to Rs 40,000 crore from the auction.

The department of telecom (DoT) has confirmed that the auction of 3G spectrum — which allows mobile phone users to surf the Internet or download music and video faster — has been deferred again. The auctions will not be held on January 30 and the DoT will notify the new dates soon. Last month, the DoT had postponed auctions to January 30 from January 16.

Telecom operators — both GSM and CDMA — have been lobbying the government to delay the process because of cash constraints and the limited market for 3G services.

Moreover, both domestic and foreign telecom firms have sought a greater clarity on spectrum allocation, merger rules and rollout norms.

Foreign players, who have been allowed to bid as 100 per cent entities, are concerned about getting clearance from the Foreign Investment Promotion Board and finding a domestic partner.

DoT officials, however, hope that the auctions will be completed before the general elections are held.