India’s long-delayed auction of 3G and WiMax spectrum, is finally moving forward, reports Unstung today. India’s Department of Telecom has now set the base prices for the country’s 3G and WiMax spectrum.
The starting price for each slot of 3G spectrum is 35 billion Indian Rupees (US$716.4 million), lower than the ($827 million) price previously signaled by the government but higher than the original ($413.5 million) price suggested. Three available blocks of WiMax spectrum will be auctioned separately in the 2.3 and 2.5GHz band.
Five blocks of pan-India 3G spectrum are available, but one has already been allocated and divided up between state-owned carriers Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) , which have already launched their initial 3G services. MTNL operates in the metro service areas, or “circles,” of New Delhi and Mumbai, while BSNL operates in the other 20 circles.
That leaves four blocks for the 3G auction, which is now set to take place before the end of November. The designated spectrum blocks are in the 2.1GHz band.
Cellular Operators Association of India, or COAI – a body representing mobile phone operators under the GSM technology – was disappointed with the price, reports the Wall Street Journal. “It will be an unviable business case… be it 2G, or 3G, it’s a price sensitive market. Operators can’t afford to run [services] in a price like this,” said T.V. Ramachandran, COAI’s director-general, adding that many potential bidders will be put off by the price.
Three available blocks of WiMax spectrum in the 2.3 and 2.5GHz band have a separate base price set at INR17.5 billion ($358 million). The Government intends to allocate 4 blocks of unpaired 20MHz spectrum in each of the 22 service areas (pdf), with 2 blocks in the 2.3GHz band and 2 blocks in the 2.5GHz band. One block in the 2.5GHz band will be reserved for MTNL (in Delhi and Mumbai) and BSNL (in all other service areas) and the remaining 3 blocks will be put up for auction.
Local media reports from the Economic Times, quote telecom minister A Raja as saying the government expects to raise INR250 billion ($5.11 billion) from the spectrum sales.
The 3G auction had been set to take place early this year, but was subject to repeated delays that have allowed BSNL and MTNL to steal a march on their privately owned rivals. (See: India Faces 3G Delay)
Bharti TeleVentures, Reliance, SIFY, BSNL and VSNL (Tata Group) have all acquired WiMAX licenses in 3.3 GHz range and are in various stages of trials. The Economic Times of India reports that Tata Communications (TCL) has signed up 50,000 subscribers for its fixed WiMAX service.
India is now the second largest wireless market in the world. India’s mobile operators added 11.59 million subscribers in May, taking the country’s total to 415.25 million, according to the latest figures from Telecom Regulatory Authority of India (TRAI).
China had 627.3 million mobile-phone users at the end of October, 2008, making it the largest telecommunications market by far. The United States is the 3rd largest wireless market, according to the CTIA. The CTIA reports there were about 270 million total wireless subscribers in the USA at the end of 2008, with about 87% penetration. They include Verizon (86M), AT&T (78M), Sprint (49M) and T-Mobile USA (30M) which total about 243 million.
Infonetics Research forecasts the worldwide WiMAX equipment and devices market to hit $4.9 billion in 2013, predominantly driven by developing countries.
In other news, mobile phone operator China Unicom plans to start selling two versions of the iPhone in China in the fourth quarter of 2009, under a three-year deal, an Apple representative confirmed Friday morning. It plans to keep the price modest by offering subsidies to customers, according to The Wall Street Journal. The agreement does not include revenue sharing. In accordance with Chinese regulations, the iPhones will be sold with their Wi-Fi function disabled, the Journal reported.