The 3G spectrum will be auctioned to private telecom operators and both the government-owned companies will have to pay price equal to the highest private bid in their respective service areas, Communication and Information Technology Ministry said in a statement. Mr A Raja, who holds charge of the Ministry, approved the release of one block of G3 spectrum to MTNL in Delhi and Mumbai metro service areas, while another block to BSNL for other service areas.
The approval follows the Minister's announcement last week to allow the government-owned telephone companies a first-mover advantage over private operators.
The spectrum blocks released for the two companies have the size of 2x5 MHz in 2.1 GHz band, the statement said.
Mr Raja also approved release of a block of 20 MHz BWA (broadband wireless access) spectrum each to both the public sector undertakings. The spectrum block released for the two companies will be in the 2.5 GHz band at 2645.0 MHz, the statement added.
The Ministry said 3G and BWA spectrum would be allocated to private companies through auction and BSNL and MTNL will pay a price equal to the highest bid in the respective service areas.
Mr Raja announced waiver of annual licence fees in terms of adjusted gross revenue (AGR) on BSNL's rural wire-lines in an apparant bid to make rural business of the government telecom companies viable.
He also approved payment of upto Rs 2,000 crore per annum from Universal Service Obligation (USO) Fund to compensate loss from operations in rural areas caused by removal of access deficit charge (ADC) by telecom regulatory authority of India (TRAI).