3G services may finally see the day in India in a big way but a very high investment for private operators as the DoT is likely to follow finance’s Ministry’s proposal in hiking the base price for 3G services spectrum from originally decided Rs 2020 crore to Rs 4040 crore and for broadband wireless access (read WiMAX) from Rs 1010 crore to Rs 2020 crore for a pan-India licence.

DoT can take relief from the fact that the finance ministry may approve the move to auction 8 blocks for 3G spectrum. Finance Ministry was earlier advocating for limiting the slots to 5 in each circle. The slots include a slot for BSNL and MTNL in their respective areas of operation.

The speculated developments are now to be taken before the Cabinet and subsequent to its approval, the final policy guideline for 3G and BWA will see the day.

The case for the Finance Ministry appears to have become strong amidst the fiscal deficit faced by the country. The government wants to make use of the auctioning to the optimum use in generating revenues. It maybe remembered that telecom sector contributed the maximum to the government in form of tax in 2008 coming next only to the tax collected from citizens.

However the development while ensuring good revenues for government may ultimately result in keeping foreign investors at bay due to the high price.