[Asian Age] The telecom ministry is hopeful that a solution to the controversy regarding the auction of 3G spectrum would be found soon with the new government in power.
The auction of 3G spectrum has been held up for the last 5-6 months due to differences between the telecom and the finance ministries on what should be the base price for the pan-India 3G spectrum.
"Hopefully, the matter would be resolved soon," said an official from the telecom ministry.
The finance ministry wanted the telecom ministry to double the sum of Rs 2,020 crore, which it had declared as the base price for the auction of pan-India 3G licence. Due to these differences, the telecom ministry was forced to delay the date of 3G auction thrice.
Finally, the government decided to refer the whole matter to a 10-member group of ministers (GoM) headed by the external affairs minister, Mr Pranab Mukherjee. However, due to the election code of conduct, the GoM could not take a decision. The government has already allocated the 3G spectrum to the public sector unit (PSU) telecom companies, which have already started the services in some of the circles.
However, the PSU telecom companies have not been able to attract any significant number of 3G subscribers. The GSM player’s body, Cellular Operators Association of India, said on Sunday that it wanted the 3G spectrum auction to start as early as possible so that private operators started the service soon. The auction of spectrum also assumes importance for the new government as it has to deal with a high fiscal deficit.
The government is already borrowing heavily from the market, which has kept the interest rates high even when RBI has cut the repo rates several times in the recent past.
Last year, the government had estimated that it could earn about Rs 35,000 crore from the 3G spectrum auction. However, due to the global meltdown this amount has been revised downwards.
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