Sandeep Joshi

NEW DELHI: The launch of pan-India 3G mobile services is unlikely to be achieved under the Congress-led United Progressive Alliance Government. Though Communications and Information Technology Minister A. Raja is hopeful of completing the 3G spectrum auction by March this year, the Interim Budget 2009-10 clearly says that the auction process will take place only in the next fiscal.

Setback

Though the government has achieved excellent growth in terms of expansion of telecom subscriber base over the past five years, the failure to introduce full-fledged 3G services and delay in introducing mobile number portability will be a big setback for the outgoing government.

Despite limited launch 3G services in Delhi by the state-run MTNL, which is also planning to introduce it in Mumbai soon, the pan-India launch is still a distant dream. BSNL and MTNL have already been given start-up spectrum by the government, while private players who will play dominant role in the 3G market will only get it through auction.

Expansion of base

The UPA Government has seen a big boost in telecom subscriber base under its regime — from less than 8-crore subscribers in 2004 to over 40-crore by January this year — all due to a massive spurt in the mobile subscriber base. But corruption charges in 2G spectrum allocation and controversy over 3G spectrum auction can be a cause of big worry for the outgoing government.

Despite Mr. Raja’s statements that the Group of Ministers (GoM), formed to resolve the pricing and other issues related to 3G spectrum, would be set up soon, and that the Defence Ministry has agreed to release 15 MHz for starting 3G services, the rollout of advanced mobile services by private operators will still take some months.

Poor response

Another setback for the government is the lowering of revenue target from 3G spectrum auction, down from initial estimates of Rs.30,000-Rs.40,000 crore to Rs.20,000 crore, mainly due to ongoing global economic crisis that has so far evoked poor response from domestic as well as global telecom giants.

“We were earlier anticipating revenues of Rs.30,000 crore from the 3G spectrum auction. But in the Budget we have factored in this figure at a conservative level of Rs.20,000 crore which could be higher or lower depending on the market price brought out at the auction process next fiscal,” Economic Affairs Secretary Ashok Chawla had told journalists after the Interim Budget was presented in Parliament.

“3G spectrum auction will not take place this fiscal as there are still some unresolved matters which cannot be solved in the current fiscal and there is a GoM which is yet to be set up to look into the issues,” Mr. Chawla had said.

GoM has to arrive at the reserve price for the spectrum auction which has been a bone of contention between the Department of Telecom and Finance Ministry.