Monday, 15 September 2008

India's 3G woes continue

India's Department of Telecoms (DoT) has rejected calls from the country's Finance Ministry to raise the reserve price for 3G spectrum.

According to a report from the Economic Times, the government requested the charge be increased from INR2,200 crore ($4.78 billion) to INR2,500 crore ($5.43 billion).

"[The] DoT has carefully considered the suggestion of the Ministry of Finance to raise the reserve price...but maintained the status quo since the ascending order auction would in any case discover the price in consonance with market conditions," said sources at the DoT, in the report.

This latest twist has added to growing scepticism from global operators about the feasibility of entering India's fast-growing mobile market.

"The issue is not just the extent of investment required to get licences and establish networks," said telecoms analyst Sudipto Basu, in a report by the Calcutta Telegraph.

The report said that operators including AT&T, Deutsche Telekom, Orange and DoCoMo, were mulling the possibility of buying equity stakes in Indian operators as a means of entering the 3G space.

However, this could be set to change.

"Foreign 3G players have been advised to wait until the auction is over and not to compound their risks in a situation which is not entirely clear," said Mahesh Uppal, a director at telco consultancy Com First, in the report.

Read up on the background to India's 3G saga on Total Telecom

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