Date:25/05/2008 URL: http://www.thehindu.com/2008/05/25/stories/2008052551771100.htm

National

Foreign companies will be allowed in telecom sector: Raja

Sandeep Joshi

Spectrum auction for 3G services referred to the Law Ministry
TRAI favours preference to existing domestic operators

NEW DELHI: Communications and Information Technology Minister A. Raja has said much-awaited 3G (Third Generation) telecom services would be launched by the end of this year and guidelines for the same issued next month. He also said foreign companies would be allowed to offer 3G services, either through open auction route or via foreign direct investment (FDI) in telecom firms.

“If we allow common auction or open auction, there will be no bar on participation of companies, both domestic and global firms. Foreign players can also participate in the growth of 3G services by partnering with local players, taking advantage of the 74 per cent FDI allowed in the Indian telecom firms,” Mr. Raja told reporters at the Telecom Summit organised by the Association Chambers of Commerce and Industry of India (Assocham) here on Friday.

The Minister said the modalities of working out the spectrum auction for 3G services have been referred to the Law Ministry.

Mr. Raja will soon be meeting Prime Minister Manmohan Singh and Finance Minister P. Chidambaram for their views on the controversial issues of spectrum pricing and entry of foreign players in the 3G space.

Stating that 3G services were likely to be rolled out by the end of this year or early next year, Mr. Raja said it would be a smooth rollout as all existing operators are ready to offer 3G services as they do not need new infrastructure. The Department of Telecommunications (DoT) has already issued draft 3G guidelines.

The matter is being hotly debated as the DoT is favouring entry of foreign players through open auction to boost competition and get better value of scarce spectrum, while the Telecom Regulatory Authority of India (TRAI) has recommended that first the existing domestic operators be allowed to offer 3G services. The DoT is also awaiting release of additional spectrum from the defence forces that has also led to the delay in the launch of 3G services.