Further complicating a process already plagued by delays and charges of corruption, India’s Ministry of Law and Justice said that the government could expose itself to massive financial penalties if it proceeds with the planned auction of wireless spectrum for 3G networks.
Originally planned for January, the auction date had already been pushed back to mid-February. Now it appears that the auctions could be postponed until the fall, seriously delaying the rollout of wireless broadband in one of the world’s largest markets for mobile devices and services.
At issue is the inconvenient fact that the government Department of Telecommunications doesn’t actually own the spectrum it plans to auction. India’s defense forces have long controlled the airwaves designated for sale, and while the Ministry of Defense has agreed to vacate the spectrum, it is unlikely to do before mid-year.
The official notice of intent to sell the allotted spectrum specifies that, if for any reason the government doesn’t assign the wireless bands to the winning bidders before the end of 2010, the Indian government could be liable for wireless carriers’ deposits plus compound interest.
India has said in the past that it expects to reap as much as $7.5 billion from the sale of valuable wireless spectrum. The process, however, has been clouded by charges of favoritism on the part of the Telecoms Dept. and restrictive regulations that effectively made it impossible for foreign carriers to successfully launch competitive 3G services based on the spectrum for sale.
"It has been going on for the last three years,” an exasperated Sunil Mittal, the chairman of Bharti Airtel, India’s largest wireless carrier, told PTI News. “We can do nothing until the government starts the auction. We are ready to participate in the auction."
