$7B Target for India's 3G Auctions
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