Price of 3G and BWA spectrum

As the excitement generated by the EGoM decision to increase the reserve price for 3G and BWA spectrum dies down, thoughts have turned to the fairness of pricing. As expected, both COAI and AUSPI are unhappy at the increase in the price (from Rs 2020 crore, set last year). On the other hand, the WiMAX is pleased with the price for BWA spectrum. Given the current economic climate, it is yet to be seen how many operators will bid for the spectrum. It is likely that all the big boys will be in the ring for 3G spectrum in light of the 2G spectrum crunch. However, using 3G simply to augment voice capacity does not sound like a viable strategy when the price of spectrum is so high. The situation with BWA is not that clear yet.

EGoM for 3G

The 3G spectrum auctions are set to be delayed even further with the government announcing the formation of an empowered group of ministers (EGoM), led by the Finance Minister, Pranab Mukherjee. The EGoM also includes the IT & Telecom minister, Mr. A. Raja and a number of senior cabinet ministers. It is expected to take a final decision on the reserve price for 3G and BWA spectrum and also set the number of players to be allowed in each circle.Although Mr Raja had earlier said that auctions will be completed by October 2009, the latest development clearly means that there's no early end in sight. At a time when the operators in Western Europe, North America and the Far-East are getting ready to deploy LTE, India is still struggling to formulate a policy on spectrum auctions.