$7B Target for India's 3G Auctions

The Indian government has budgeted for the impending 3G auctions to deliver revenues of 350 billion Indian Rupees (US$7.26 billion) during the 2009-2010 financial year, reinforcing the now widely held belief that the reserve price for the auction will be raised.

Indeed, it would suggest that the finance ministry has got its way and the reserve price for each spectrum block will be doubled to INR40.4 billion ($838 million). (See India Auction Countdown.)

In the 2008-9 budget, into which the 3G auctions had originally been scheduled to fall, the government had valued the 3G licenses at INR200 billion ($4.13 billion). The 43 percent price hike is due to the finance ministry's belief that the spectrum is worth more, and thanks to more blocks being available after spectrum was released by the defense services. (See India's Operators Set for Spectrum Windfall.)

In total, the Indian government expects to raise INR483.35 billion ($10 billion) from telecommunications, but is committing to spend much less at INR167.31 billion ($3.47 billion).

Struggling, government-owned vendor ITI is to receive INR28.2 billion ($585 million) to clean up its balance sheet, according to an Economic Times report.

This is in preparation for the company to be broken up and sold off in units and is aimed at making the businesses more attractive to potential buyers. (See India's ITI Is up for Grabs.)

In the same report, the Economic Times says that slightly less -- INR24 billion ($499 million) -- has been assigned in the year for the provision of mobile, Internet, and landline services in areas that aren't financially viable for telco operations.

This cash comes from the much maligned Universal Service Obligation Fund, into which all operators pay a percentage of their revenues. The fund currently stands at over INR200 billion ($4.51 billion), according to the report, but allocation of funds continues to been plagued by accusations of unnecessarily bureaucratic tender processes. (See A Guide to India's Telecom Market for more on rural connectivity.)

— Catherine Haslam, Asia Editor, Light Reading

photonic_light 12/5/2012 | 4:00:59 PM
re: $7B Target for India's 3G Auctions

It is an absolute disaster to recover ITI. Tax payers funds going to the drains again.

Rather Govt should sell off ITI's Real Estate assets and clear the debt.

Budget allocation should at least go to local manufacturing support by private players.

The 30% quota is an absolute waste..ITI cannot do it..its just a back door for other vendors. Finally its the operators who suffer and Indian Tax payer who pays the bill.

Cut the crap..please









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