3G auction may be delayed again: India

The auction for four 3G slots was to be held in February.

The delay stems from a lack of space on the airwaves and would be the fourth postponement of the auction in the past year, local newspapers said.

The Times of India and other papers quoted unnamed government officials as saying the sale now would only take place in August or September as the defense ministry could not vacate the airwaves needed for the sale until mid-year.

The auctions for licenses for 3G mobile phone services and WiMax wireless broadband services could raise 250 billion rupees (US$5.39 billion) for the cash-strapped government, Communications Minister A. Raja said last August.

Some reports estimate the proceeds could reach at least 350 billion rupees.

Introduction of 3G services would allow high-speed Internet, video downloads and other sophisticated services on mobile phones.

India, which has the most mobile users after China, with 525 million subscribers, is the largest economy in the world not offering 3G cellular services nationwide.

The communications ministry has sufficient airwaves to sell two 3G slots while the defense ministry has enough for two more.

But the defense ministry has said it cannot vacate the airwaves until an optical fiber cable network is built to connect key defense locations.

Such a network would take months to roll out.

The law ministry has said the auction should only be held when the radio frequency is available, the Daily News and Analysis and other newspapers reported.

The cash-strapped Congress government had been keen to hold the sale before the end of the current fiscal year in March to help plug a yawning fiscal deficit.

Failure to hold the sale could boost the deficit, now pegged at 6.8 percent of gross domestic product for this year, by 0.6 percentage points, the Times said.

India's state-run phone companies Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd offer 3G services in some parts of the country. Private firms use slower second generation (2G) networks.

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