India May Delay 3G Auction, Raise Prices

Long-awaited 3G and Wimax auctions may be pushed back to mid-February as the government mulls a Finance Ministry request to double the minimum bid prices

India's long-awaited 3G and Wimax auctions may be delayed yet again, as the government considers doubling the floor price for prospective licensees.

Late last month, the Indian government announced that the 3G and Wimax auctions were delayed from January 16 to January 30.

But a communications ministry insider has told India's Economic Times that the auction is likely to be delayed again, this time until mid-February.

One reason for the delay is a request from the finance ministry to double the minimum bid prices. Under the proposal the 3G price will be raised to 40.2 billion rupees ($835 million), with the minimum Wimax bid raised to $419.8 million.

Analysts believe that this about-face has been prompted by a less-than-stellar response to the recent pre-bid conference.

Attendance was reportedly particularly low amongst foreign operators, who have long griped that the system has been set up to favor local companies—despite the government's efforts to the contrary.

The government is also having trouble freeing up spectrum, and as a result may have to place winning operators on a waiting list.

A decision to delay the auction process could make the head start granted to state-owned operator MTNL—which "soft-launched" 3G services last month—even more significant.

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