India said on Saturday a long-delayed auction of radio bandwidth for third generation (3G) telecommunications services would start in January and would be open to foreign companies.
The auction will start on Jan. 14 with bids to be submitted by Dec. 21, the Department of Telecommunications said in an announcement posted on its Web site, adding that the time schedule could be revised.
The auction of 3G radio spectrum for mobile services will put India’s cellular market — the fastest growing in the world — on track for a new level of wireless telephony, experts said.
The government has said it aims to raise 250 billion rupees (US$5.38 billion) from the sale of 3G bandwidth that would allow high-speed Internet, video downloads and other sophisticated media services on cellular telephones.
The government hopes to use the money raised from the auction to help plug a yawning fiscal deficit.
“The government of India is keen that potential new entrants to the Indian telecommunications sector, as well as existing operators, should be encouraged to take part in the auctions,” the ministry statement said. “Interested foreign entities are allowed to participate in the auctions directly and apply for licenses subsequently.”
Non-Indian players will have to find Indian partners as India caps foreign ownership in telecommunications companies at 74 percent.
India has said it aims to sell four 3G licenses and three broadband wireless access licenses in 20 of the 22 telecoms zones. It does not have available spectrum to auction in the other two zones.
India is hoping to draw wide interest in the auction of spectrum for its mobile market, which is adding more than 10 million users a month, thanks to some of the world’s cheapest calling rates.
The announcement of the sale comes as the ministry faces questions over the sale of telecoms licenses to domestic players last year.
Government investigators raided the ministry on Thursday and on Friday as part of a probe into alleged “serious irregularities” involving the sale of the licenses.
Some of the companies that won licenses later drew investment from major foreign investors.
The Central Bureau of Investigation alleged in a statement “a criminal conspiracy between certain officials” of the ministry and “private persons/companies and others in order to award licenses to these companies.”
The agency said it registered criminal cases against unnamed officials working in the department and company executives for conspiring to keep license prices down.
Telecoms Minister A. Raja has denied any “irregularities” in the awarding of the licenses and has rejected opposition calls for his resignation.
RSS