3G Spectrum Auction in India - Current Status

India is supposed to be the booming telecom market all over the world.

Facts about telecom industry in India:

• India has around 490 million mobile subscribers by the end of November 2009.
• India has mobile penetration of around 40%
• Rural penetration is around 32%
• 12 mobile service providers are existing and around 4 more in line to launch their service.
• Competitive pricing strategy is compelling TSP to generate more innovative ways to create revenue
• ARPU for the companies is reducing drastically.

All these figures are just a glimpse. But the main fun will be when one of the most awaited technology will be launched in India.

3G (Third Generation of Mobile Communication)

When the world was welcoming 3G, India was struggling to implement fully functional 2.5G in India.

Now it has been a situation that the American and European market is almost saturated for 3G implementation but still, India is trying hard to launch its 3G service.

Government Stance:

Government decided to do auction of 3G much before but the process is "still" under review.

Facts:

• Initially Govt decided to auction 3G spectrum on May 2009.
• Later it got postponed to Sep 2009. Many of the service providers gathered money and were geared up for the auction.
• But government later changed its decision and decided to do the bidding program on 7th Dec 2009. And as expected, government changed its mood and postponed to Jan 14, 2010.
• Now the current news is that the auction is still delayed to mid of Feb or Mar 2010.

So what this is all about?

Government is giving reason that defense is not releasing spectrum on time. Also they are saying that now there will be only 3 private players who will get 3G after auction. This will heavily impact the business strategy of the companies who are betting big time on 3G.

People have kept lot of hopes on the competitive pricing of 3G too. Now if the government delays the auction, it will generate a vicious chain of events which will create lot of problem for many players.

Group getting affected by delay in 3G auction:

· Telecom Service Providers who have invested a lot on 3G infrastructure.

· Equipment Vendors like Alcatel Lucent, Nokia Siemens Networks and Juniper networks.

· Indian Telecom Department who are waiting for proper revenue from 3G auction.

But all this will take place only when Government takes proper steps to auction 3G.

Hopefully the auction will be ending by March end and the companies will be launching services by the end of October 2010.

Keep reading my blog for latest news of 3G telecom auction in Indian market.

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Hardik