Foreign telcos can go it alone for 3G spectrum bidding: DoT

Mumbai: Foreign telecom companies can bid for 3G spectrum without teaming up with an Indian partner.  However, they would be required an Indian telecom operator as a partner to apply for unified access service licence (UASL) when they win a bid, the deportment of telecommunication (DoT) has clarified.

This is because foreign companies have set investment limit for Indian operations under the foreign direct investment (FDI) regulations, DoT has clarified.

In the telecom sector, FDI is allowed up to 74 per cent. So, a foreign company would need to an Indian partner for the balance 26 per cent to secure a licence and start operations.

However, any delay in finding a partner by a successful foreign bidder could delay the roll-out of third generation (3G) services that is expected to provide faster data download and video streaming services.

DoT secretary Siddharth Behura, meanwhile, allayed fears that though foreign telecom companies would be allowed to participate independently in the 3G auction, the FDI rules would further postpone 3G roll-out in the country.

Unlike the 2G policy, under the 3G guidelines, the government plans to issue UAS licence (non-licence holders) to a successful overseas bidder - a shift away from the policy wherein a telecom start-up receives start-up spectrum of 4.4 MHz bundled with a pan-India UAS licence for Rs1,651 crore.

The 3G auction is expected to bring at least Rs40,000 crore for the government and the allocation would be made in 2 blocks of 5MHz each in the 2.1 GHz. This  would be insufficient for service roll-out for new players while it may suit existing players who have to lay their 3G network over the 2G.

Foreign players are reported to have asked the DoT to allow them to bid as 100 per cent foreign entities or give them a minimum of six to seven months to tie up with Indian firms before the auction of the spectrum.