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2G spectrum auction plan back on track

New Delhi, May 24: The new Congress-led UPA regime may initiate the auction of second generation (2G) spectrum, which has been hanging fire because of differences within the government.

Also on the agenda will be the implementation of mobile number portability, speeding up of the auction of third-generation (3G) radiowaves, listing of state-owned Bharat Sanchar Nigam and simplification of the levy structure.

While Prime Minister Manmohan Singh and the finance ministry had favoured the auction route in line with the global practice, the then telecom minister A. Raja insisted on allocating spectrum on a first-come, first-served basis.

At present, operators are eligible for additional spectrum on the basis of their subscriber base.

Spectrum allocation based on subscribers had hit a hurdle in 2007 when the government decided to increase the number of users required to get additional spectrum.

A recent committee set up by the department of telecom (DoT) to review the policy has recommended auction of fresh spectrum and doing away with subscriber-based criteria.

Industry is hopeful of the new government bringing in changes to give a boost to a sector whose growth has a direct bearing on the country’s GDP.

“The telecom sector needs a stable spectrum allocation policy. If the government decides on the auction of additional spectrum (for 2G services), we’ll align with the new policy. But, it should be a universally applicable regime, and not differentiate against any player,” said Sunil Mittal, chairman and managing director of Bharti Airtel.

The new government will also speed up the auction of 3G licences, enabling the users to enjoy value-added services such as high-speed Internet and video conferencing.

The move will also add at least Rs 30,000 crore to the government kitty, helping it to narrow the widening fiscal deficit.

The 3G auctions have been postponed many times because of differences among the ministries of finance, defence and communications over issues such as the base price.

While the DoT wanted to keep it at Rs 2,010 crore, the finance ministry wanted to double the amount to generate more revenue.

Analysts said the UPA might also reintroduce its free broadband facility.

BSNL’s listing is also on the cards, and a long pending demand by the industry to reduce and simplify the existing levy structure will also be discussed.

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