After a lot of speculation and pondering the communications and IT ministry have frozen a reserve price of about Rs 2,260 core for participating companies in a pan-India auction for third generation (3G) spectrum. And how did they reach this figure? Well here is a breakdown

Category Price No. of Circles

Metros Rs 160 Cr 4
Category A Rs 160 Cr 5
Category B Rs 80 Cr 8
Category C Rs 30 Cr 6
Total —– Rs. 2260 crore

As per sources the Communication Ministry will even allow international telecom players to take part in the auction. But the catch is that international companies taking part in the auction must have serviced 3G for at least a year. This move contradicts the Telecom Regulatory Authority of India (TRAI) in two ways: By issuing doubled reserve price and by allowing foreign firms to participate which are against TRAI recommendations.

As per the new 3G policy telecom companies would have to share revenues with the government in the first year. And that’s not all! The service providers will have to dish out spectrum hoarding cess of 2.5 percent of the amount they bid if they fail to meet the stringent rollout obligations stipulated by the government.

The new policy is a great opportunity for global telecom players to enter the Indian market.

The government is going ahead with the global auction despite repeated warnings from TRAI.