India 3G: And They're Off!

11:25 AM -- India's 3G spectrum auction has begun, with nine bidders vying to secure spectrum in the 2.1GHz band. (See Bids Flood In for India's Spectrum Auctions and India Watch: The Road to 3G.)

And it seems the Indian government has high hopes of a healthy return from the 3G and imminent BWA (broadband wireless access) spectrum auctions. Telecom minister A Raja is expecting the auctions to reap a combined total of up to 450 billion Indian Rupees (US$10.1 billion), according to local reports.

That may be ambitious, but spectrum auctions have a habit of generating bidding frenzies. And while there are a number of views about how much the 3G spectrum auction might raise, from KPMG International 's $5 billion-plus to the near $7 billion predicted by Pyramid Research in a recent report, it's anyone's guess what sort of money might come forward for the BWA spectrum, which has attracted 11 interested bidders. (See India 3G: What's That Spectrum Worth? and India Watch: 3G Update, Ericsson Bumper Deal.)

But while the Pyramid team expects India's major operators -- Bharti Airtel Ltd. (Mumbai: BHARTIARTL), Reliance Communications Ltd. , and Vodafone India -- to walk away with the 3G spectrum they're looking for, they don't believe that landing a 3G license is critical to success in the Indian market.

"Significant opportunity exists for 3G winners and losers alike," notes the report's author, Elizabeth Bramson-Boudreau. She believes 3G services will be targeted at the "huge and prosperous middle class," while the country's expansive rural areas offer enormous potential for 2G operators that can develop segmented services strategies, deploy low-cost technology, and share infrastructure.

— Ray Le Maistre, International Managing Editor, Light Reading

Sign In