India’s government has finalised the plans for its 3G and WiMAX auctions – with the 3G auctions starting on January 16th next year. Auctions for WiMAX licenses will commence two days after the 3G licenses are sold­.

According to a memorandum from the Department of Telecoms, there will be a pre-bid conference next week, with the final submissions to enter the auction being due on the 5th January. The short list of bidders will be announced on the 9th followed by a “mock-auction” to test the systems a few days later.

As expected, the two state-controlled operators, BSNL and MTNL have been granted licenses in all 22 circles in the country – and the government has outlined how many extra licenses will be available in the rest of the country. There have been concerns about a lack of radio spectrum in some parts of the country, and Delhi will be limited to just two private companies operating 3G networks – while Mumbai could have up to four private operators (in addition to the state operators).

The worst affected area is is the North East circle where only the state owned operators will be able to provide services – although Rajasthan is actually not offering any 3G services at all.

The licenses are all valid for 15 years.

To make it easier to raise funding, and hence boost the government coffers, there is also a proposed relaxation of External Commercial Borrowing (“ECB”) guidelines to permit ECB up to US$500 million to finance spectrum acquisition fees.

Foreign companies will be able to bid for a license on their own – but will then need to find a local partner willing (and able) to take a 26% stake in the company.

As for the WiMAX licenses – there is sufficient spectrum in the 2.3Ghz and 2.5Ghz bands to allow for three private operators in each of the country’s circles – in addition to the two state owned operators who have also been granted WiMAX licenses.

The 3G/BWA auction document also confirmed that the government is preparing to permit MVNOs in the country and that details would be made available shortly.

The full auction guidelines (pdf file 136 pages) can be downloaded from the Department of Telecoms website.

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