3G License Bidding Reaches US$1.36 Billion

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Apr. 20 – On the eighth day of India’s ongoing auction of third generation (3G) licenses, bids increased by an estimated 73 percent from the original base price set by the government to Rs.60.7 billion, or about US$1.36 billion.

“Earlier, I said the auction could fetch Rs. 30,000-35,000 crore, but now I am optimistic that it may go up,” Communications and IT Minister A. Raja told The Business Standard.  The auction is forecast to bring the government at least US$8 billion with the process lasting several weeks.

The top bids went to Delhi Circle areas at Rs.6.9 billion followed by Mumbai at Rs.6.3 billion and Tamil Nadu with Rs.6.1 billion. There are also auctions being held for broadband wireless access.

The country’s major telecommunications companies Bharti Airtel, Vodafone Essar, Tata DoCoMo Reliance Communications, Idea Cellular and Aircel will be competing for 20-year 3G licenses to one of the most dynamic markets in the world. Access to 3G service will give Indian users faster access to voice and data content. Mobile phones sold in the country increased from 35 million in 2005 to 130 million in 2009, according to the Indian Cellular Association.