Finally, Indians to get 3G by September but don't hold your breath on a 4G timetable

As Mobile World Congress was in full swing in Barcelona, news broke that India’s long-awaited and much-postponed 3G auctions had been put off again. Fortunately prospective bidders were not made to wait long before a new date was set. It was announced this week that the auction will take place on April 9 this year.

Despite the confusion over the timings the Indian Government has released a long list of official answers to questions put to it by bidders in relation to the process. Much of it is highly technical, but the overall gist is: count your blessings.

The auction releases spectrum in the 2.1 and 2.3 GHz bands and will be held on April 9 after a mock auction a couple of days earlier for bidders to familiarise themselves with the process. The 2.1 GHz band is earmarked for 3G and 2.3 GHz is for broadband wireless access.

It is believed many existing players as well as some start ups will be in the running for spectrum which is expected to raise as much as US$7.8 billion for the Indian Government, according to Budget documents released today.

Given the interest and the delays in the auction process many prospective bidders are asking about the next phase in the process as the rest of the world moves to 4G and long-term evolution technologies. The Indian Government has answered saying they are involved in a wholesale review of spectrum.

“The Government is working on refarming of spectrum and making spectrum available in other bands, including the 700MHz band. It is not possible to provide timelines in this regard,” the statement said.

Such is the interest that the questions put by potential bidders about the process numbered 388, forcing the India’s Department of Telecom to produce a 96-page report filled with answers, although for various reasons they were unable to answer many questions about the road ahead.

Vendors and bidders have business priorities but many also believe it’s time for India to get its act together on spectrum for the simple reason that it will be good for the country.

“I think it’s a national priority for the Indian government to sort out and finalise the license process for 3G both from a macro-economic development point of view and from a consumer point of view. The sooner they get that sorted out the better,” Alcatel-Lucent’s new President in Asia, Rajeev Singh Molares, told Telecom TV.

Wipro co-CEO Girish Paranjpe said he hoped the auction was not postponed again, however he said people should remember how much had changed in India in a short time, in relation to telecommunications and look at the good job 2G was doing serving the populace.

“Over the last 10 or 15 years wireless has completely revolutionised the the telcommunications industry in India. Ten years ago we had less than five million people who were phone owners. Today there is 350 million people who are phone owners who are connected and the expectation is in the next three years, by 2012 the number will rise to something like 700 million people who will be connected and wireless has made this possible,” he said.

“Even though (the auction) has been delayed, from a social perspective, 2G and the low cost point and the innovative business models have completely revolutionised India and the way people communicate with eachother.”

In response to questions about the impact of the financial crisis on the ability of bidders to raise money, the Indian Government says they are considering allowing tax depreciation benefits on the upfront auction price.

Under the new auction guidelines, three players will be allowed to enter the 3G market in 17 districts across the country. Two state-owned Telcos have also been allotted 3G spectrum.

The Department of Telecom had been locked in a battle with India’s Department of Defence over getting access to 3G spectrum that the military controlled.

Applications to participate in the auction will close on March 19.