India announces 3G auctions: but are all the ducks lined up?

Posted on February 24, 2010  /  1 Comments

Despite the fact that not all the frequencies have been cleared, India has announced the 3G auctions will be held in April. The original date was January 2009. Perhaps the driving force was the government’s need for money, rather than the conditions being right.

India’s long-delayed auction of third-generation (3G) mobile phone bandwidth will be held on April 9, the government announced Wednesday.

Applications from bidders for the multi-billion-dollar auction, whose proceeds are earmarked to help plug a gaping fiscal deficit, will be accepted until March 19, a government notice said.

The auction is seen as key to developing India’s mobile market which has been growing by 15 million to 20 million subscribers a month, making it the world’s fastest expanding.

3G, common in developed countries, allows mobile phone users to surf the Internet, engage in video conferencing or download music, video and other content at a much faster rate than the current second-generation or 2G service.

It is also crucial to improving the quality of existing voice and data services in India.

Full story.

1 Comment

  1. The Indian elephant is slowly trudging even in spectrum allocation. The auctions have been delayed thrice and the 3G services to consumers are held up by government or regulators for almost 3 years then the entire consumer surplus that could have been realized over these two years is lost.

    ITU has identified 2×60 MHz of spectrum at 2.1 GHz to 3G services using W-CDMA. So it would be possible, assuming the allocated spectrum is free, to assign 2×5 MHz to each of the 2G operators in most of the Indian circles. But most analysts believe that a 2×10 MHz or 2×15 MHz assignment per operator is required for effective deployment of 3G services – with one set of 5 MHz carriers used for macro-cells, another for micro-cells and a third for in-building coverage29. Only with this increased assignment is it possible to deal effectively with the traffic hotspots of the kind which airports and shopping malls generate.

    Thus while the proposed 2x5MHz may be a starting point, it is important to identify and reserve additional spectrum for 3G to ensure effective deployment of 3G in India.
    Failure to allocate sufficient spectrum to a market-based regime entails large costs:
    1.Broadband prices will be higher and penetration lower;
    2. The economic and social benefits of greater broadband penetration will be forgone.
    3.Prices for wireless services in general will be higher.
    4. Revenue from auctions will be low and the fiscal implications of this will be serious