3G spectrum services likely to start only by June 2010

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The government has at last reached a resolution on the 3G auction issue. There will be no further delay in the scheduled 3G auctions, sources told CNBC-TV18, adding that all issues with the defence had been sorted. "The winning bidders will be assigned the spectrum by February 2010," sources said. However, the services can start only from June 2010.

The Department of Telecommunication (DoT) has committed to prepare an alternate optical fibre cable (OFC) network for the defence in three years. In return of which, the defence will release 25 Mhz of 3G spectrum by December 7, which essentially means that the crucial markets like Delhi, where there were only two slots proposed to be auctioned will actually see four slots being auctioned.

Will this mean more revenues for the govt?

The fact that there will be more slots being auctioned means that the government is likely to get more revenues. Spectrum being a limited asset, the competition to bid for more licenses will be huge going forward.

For CNBC-TV18's Economic Policy Editor Siddharth Zarabi's comments on the issue, watch video.