India to Auction 3G Mobile-Phone Licenses in December

Sept. 14 (Bloomberg) -- India, the world’s second-largest wireless market by users, said it will start accepting bids for licenses to offer high-speed services on Dec. 7, a move that may help boost revenue at Bharti Airtel Ltd. and other carriers.

Bidders must submit any queries they have by Oct. 8, before a pre-bid conference on Oct. 12, and applications for the permits must be made on or before Nov. 13, the Department of Telecommunications said in a statement on its Web site. The government said last month it may raise about $5 billion from selling licenses for mobile-phone and wireless broadband Internet services.

The sale will pave the way for faster data services in India, the biggest economy in the world not to offer 3G nationwide. India’s number of mobile-phone subscribers has room to triple from more than 440 million, giving Sweden’s Ericsson AB, China’s Huawei Technologies Co. and Finland’s Nokia Oyj incentive to compete for network-equipment orders.

The third-generation services “will be the next phase of growth,” Nishna Biyani, an analyst at Mumbai-based Prabhudas Lilladher Pvt. said by telephone. Carriers will use the permits for airwaves to initially boost revenue from improved voice services even as they add data and broadband offerings, he said.

Bharti, India’s largest wireless operator, expects the start of high-speed services to boost “voice efficiencies” and the speed of data downloads, Chief Executive Officer Manoj Kohli said on Aug. 27. The carrier is eager to participate in the auction, he said at the time.

Gaurav Wahi, a spokesman at second-ranked Reliance Communications Ltd. declined to comment on whether the Mumbai-based operator will participate in the auction.

Revenue From Auctions

The auctions for licenses to operate third-generation mobile-phone services and WiMax wireless broadband services will earn India about 250 billion rupees ($5.13 billion), Communications Minister Andimuthu Raja said Aug. 27.

A group of ministers set a minimum price for a pan-Indian permit at 35 billion rupees, ending a nine-month deadlock over the pricing of the licenses. As many as four slots will be auctioned for each of the nation’s 22 phone-service zones, Raja said at the time.

Bharti, Vodafone Group Plc and other mobile-phone companies may gain customers by offering faster services such as music and Internet downloads that could help them offset slowing revenue growth in the more profitable urban markets. The world’s largest wireless market after China has attracted Norway’s Telenor ASA and Japan’s NTT DoCoMo Inc. AT&T Inc., the biggest U.S. carrier, has said it wants to start services in the South Asian nation.

‘Requested to Monitor’

“Participants are requested to monitor the auction Web site actively” for any changes in the schedule, the department said in its statement.

India’s Finance Minister Pranab Mukherjee has sought to delay until next year the country’s auction of rights to provide third generation mobile-phone services, Mint newspaper reported last week, citing a person familiar with the development.

India in November picked NM Rothschild & Sons Ltd. as the independent auctioneer to help it sell the permits and initially aimed to complete the process by Jan. 15.

State-controlled Bharat Sanchar Nigam Ltd. and Mahanagar Telephone Nigam Ltd. currently offer high-speed services in some parts of the country. The carriers have been exempted from the auction process.