Rs. 3,705 crore approved as Base Price for 3G Auction by Cabinet

The Cabinet has fixed the starting price at Rs 3,705 crore per MHz for the auction of 3G spectrum which is slated to start on March 4. By this the government is aiming to earn a net profit of Rs 17,555 crore. However, operators are afraid that the high starting level could drive up voice and data tariffs.
The winners of the auction will have to make an upfront payment of 33% of the final bid amount to the government within 10 days of the close of the bandwidth sale. Rest amount can be paid after a moratorium of two years in 10 equal installments.
A 5 MHz block of 2100 MHz airwaves typically used for 3G services will be offered in all service areas except Jammu & Kashmir, Bihar, Himachal Pradesh, West Bengal and Punjab. Thus, a total of 85 MHz in 17 service areas is being put to auction.
The Centre expects to generate Rs.5,793 crore from the 3G sale alone this year.  However, the overall proceeds from auctions will rise substantially, as including the 2G (800 MHz, 900 MHz and 1800 MHz) and 3G bands being put for sale. The Centre expects to generate a minimum of Rs. 80,000 crore, a portion of which will come by March end.
The final price, which was 36% higher than the Rs. 2,720 crore a unit base price recommended by the Telecom Regulatory Authority of India (TRAI), left the industry disappointed.
Despite the prices, there is likely to be demand for the airwaves. Operators such as Bharti Airtel, Vodafone India and Idea Cellular need to support surging demand for their data services.
The telecom industry, backed by the telecom regulator, though was hoping that the government will auction 15 more MHz of 3G spectrum per circle across India currently in possession of the defence forces but being negotiated for by the telecom department.- See more at: http://www.varindia.com/rs-3705-crore-approved-as-base-price-for-3g-auction-by-cabinet/#sthash.D2Thk7I9.dpuf

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