The developments surrounding the ongoing talks involving the Communications Ministry, the Finance Ministry, the PMO and the GoM continues to be under midst of lack of clarity with new speculations surfacing every now and then.

The Communications Ministry is believed to have agreed on the Finance Ministry’s proposal to double the reserve price for spectrum related to 3G and BWA. But to avoid any kind of controversy and to project that the DoT alone is not ultimate decision-maker on the issue, the proposal is set to be forwarded to a Group of Ministers to have their final review and approval. The DoT resorted to this move to avoid controversy and criticism it faced over allocating spectrum to new players for 2G services on first-come-first-served policy.

The DoT’s extra cautious attitude is holding back the final guidelines on 3G and BWA for long time now.

But things finally seem to be heading towards a conclusion due to the fact that the resolution of the 3G issue finds a mention in the UPA government’s 100-day priority agenda.

Moreover the government will present its Budget for the fiscal on July 06. It will certainly present the revenues it expects to earn in the year. And it here where more clarity on the 3G and BWA spectrum auctioning is likely to be shed. The revenues estimated by the government will give an idea of the financials to be expected pertaining to the auctioning.

And to materialize the estimates, the involved government agencies will certainly have to act fast. The timing of the budget seems to be perfect for the resolution of the issue.

The telecom sector remains to be a gold mine to the government of India contributing as much as Rs 13,000 crore to the exchequer in the last fiscal by way of licence fee renewals and spectrum charges. The auctioning should turn up to be value-add to the exchequer and help the government tide over the fiscal deficit .which currently is hovering around $ 44 billion.   

The government has a chance to gain revenues from auctioning of 2G spectrum as well from those operators seeking additional spectrum. But the government has not taken a final view on the matter even though an expert panel formed by it has strongly recommended auctioning as the mode to allot spectrum. This issue still looks far from resolution.