Call waiting

New Delhi, June 3: The telecom ministry is preparing a draft on the global auction of third generation (3G) telecom licences for discussion with other ministries.

While telecom minister A. Raja and the finance ministry are keen to open the 3G auctions to global mobile operators, the Telecom Regulatory Authority of India (Trai) and a section of the department of telecom (DoT) want the licences to be restricted to domestic players.

“However, no decision has been taken on setting up a group of ministers (GoM) to evaluate the issue,” said officials. Earlier reports had suggested that the telecom ministry was in favour of setting up a GoM to resolve this issue.

The DoT has also sought the attorney general’s opinion on whether foreign companies which do not hold telecom licences in India have the right to bid for the 3G licence.

In its recommendations submitted earlier, Trai had said 3G services were not a continuation of second generation (2G) mobile services, while insisting that only domestic players should be allowed to bid for 3G licences.

According to Trai, including foreign players will not only complicate the process but also increase the delay in implementing the 3G rollout in the country.

The DoT, on the other hand, wants to give a chance to foreign players who could not enter the Indian market earlier.

3G operators can provide high-end value-added services such as real-time transactions and video streaming. There is scope for high revenues from the service.

Existing telecom operators such as Bharti, Vodafone, Idea and the Tatas are also against the global auctioning of the 3G licence.

They feel threatened by global majors such as the UAE’s Etisalat and European and American companies.

These companies not only have the ability to pay huge money for 3G, but can also buy out new 2G operators and compete robustly, offering a 2G-3G combination in the market.

In a letter to the DoT, GSM lobby Cellular Operators Association of India had suggested that new entrants should be kept out of the 3G bidding.

It had argued that only existing operators are in a position to provide a combination of 2G and 3G services.

Raja recently said the rollout of 3G services would be completed by January 2009.

However, without the ministries and the regulator in agreement over the auction process, the launch of these services may not happen during the UPA government’s remaining term.