Sandeep Joshi

Cabinet to take final decision on pricing; reserve price for a pan-India licence could be Rs.4,040 cr.

NEW DELHI: Union Finance Minister Pranab Mukherjee and Communications and Information Technology Minister A. Raja on Friday met Prime Minister Manmohan Singh to finalise the pricing policy and other issues related to 3G mobile service.

Though Mr. Raja later said a final decision would be taken by the Cabinet soon, government sources said it had been decided to fix the reserve price for 3G spectrum at Rs.4,040 crore for a pan-India licence, which the Finance Ministry had been insisting upon.

On the other hand, the Department of Telecom wanted Rs.2,020 crore as the reserve price for giving licence for third generation mobile services that promised greater data, video transfer speeds besides advanced value-added services.

“There are several options being discussed for the reserve price and Rs. 4,040 crore, as suggested by the Finance Ministry, is one of them,” Mr. Raja told journalists. A decision would be taken within a week, he said.

It has been decided to allow a maximum of six 3G operators per circle, besides government-run telecom firms (BSNL or MTNL), depending on the availability of spectrum. At Rs.4,040 crore pan-India licence fee, the Centre is likely to garner over Rs.32,000 crore.

It has also been decided to auction spectrum for wireless broadband services (WiMAX) at a reserve price of Rs.2,020 crore and allow three private players per circle along with the state-run telecom operator. Here too, the Finance Ministry’s views prevailed over that of the DoT, which had suggested Rs.1,010 crore as reserve price for auction.

For the CDMA licence, Rs.500 crore is likely to be the reserve price for one block (1.25 MHz) of pan-India licence.