Yet another 3G delay for India, until April

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Yet another 3G delay for India, until April

By CAROLINE GABRIEL

Published: 1 February, 2010

READ MORE: Spectrum | India | Regulator | UMTS | WiMAX

Just when we thought the Indian 3G and WiMAX auctions really would kick off this month, another delay is threatened, probably until April. This will be bad news on all fronts. The wireless infrastructure suppliers may not be expecting quite a big a boost as from Chinese 3G, given the price competition in India, but the sheer size of the market is still vital to a still pressurized sector; India is probably the world's largest potential market for WiMAX; and the Indian cellcos themselves badly need the new spectrum to add desperately needed capacity and launch higher margin services.

Notwithstanding all that, the Indian government will postpone the sales into the next fiscal year, starting April 1, sources told Dow Jones newswires. The auctions have been delayed many times, most recently until January 14 and then February 12.

The Department of Telecom and regulator TRAI are also considering further auctions "very soon" after the 3G and WiMAX transactions, to support '4G' services. The first would be digital dividend spectrum around 700MHz, which India has long planned to bring into play ahead of most of the world. The 2.5GHz band is being allocated just after the 3G frequencies, and will be used almost entirely for WiMAX, because of the immediate availability of the technology. This would make 700MHz the only near term band for LTE suppliers to target, although HSPA and WiMAX may be more likely options.

However, given the history of the 3G sales, the target of "very soon" for digital dividend may not mean much. Issues that have dogged the current auction plans over the past couple of years have included disputes with the Department of Defense over vacating frequencies; and with the Ministry of Finance over the reserve prices (which were doubled during the course of 2009). Some operators also favored delay when the economic crash first hit, to give them a chance to raise financing and possible foreign partnerships. There has also been great uncertainty over the number of licenses to be sold, a figure that was reduced from four to three, in 3G, just recently (plus the guaranteed license for state owned operators MTNL in Delhi and Mumbai, and BSNL everywhere else).