3G spectrum to be allotted on Sep 1

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New Delhi, Jun 26: The government anounced on Friday, Jun 25 that it would allot 3G spectrum to successful bidders on Sep 1 and rejected the criticism of faulty auction process leading to high prices by leading operators.

Broadband Wireless Access (BWA) spectrum would be allocated to all the players, including Infotel Broadband, acquired by Mukesh Ambani-led Reliance Industries (RIL), said the government.

"While the overall proceeds from the auction for 3G and BWA spectrum at over Rs 1,06,000 crore have exceeded all expectations, an equally important aspect is that the true market value of the spectrum was determined through an efficient and transparent process," said P J Thomas, Telecom Secretary.

The government said, on the issue of RIL buying Infotel Broadband, which won BWA spectrum in all India, "the spectrum cannot be sold but as far as change of ownership is concerned, it is permitted."

Bharti Airtel, country's largest mobile operator, which won 13 out of 22 3G circles, had criticized the auction process. They had said, "We would like to point out that the auction format and severe spectrum shortage, along with ensuing policy uncertainty, drove the prices beyond reasonable levels. As a result, we could not achieve our objective of pan-Indian 3G footprint in this round."

Similarly, the company had pointed out in the case of BWA spectrum auction, "A combination of scarcity of slots and the auction format, once again, resulted in extremely high price levels."

Vodafone along with other operators echoed views and had pulled out of the auction mid way citing irrational bidding.

Anil Ambani group firm RCom and Bharti had won 3G spectrum in 13 circles each along with others. These players would be getting the frequency on Sep 1, 2010 and one can expect the third generation mobile services in the first quarter of 2011.

The revenues earned from sale of spectrum for both 3G and BWA are more than three times the target of Rs 35,000 crore, fixed by the Ministry of Finance in budget, and more than five times the reserve prices.

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