3G Service in India

After months of anticipation, customers will soon get high-speed data and even view movies on their mobile phone, thanks to 3rd generation or 3G mobile services. And the race to provide 3G services, just got hotter.

The government has laid the roadmap for 3G services, allowing International players to bid for 3G spectrum. But initially, only 5 players will be allowed 3G access in each telecom circle. That could double in circles where more spectrum is available.

CDMA players will get spectrum in 3 bands, while GSM players will have to make do with just one band. A pan India bid for 3G spectrum will cost at least Rs 2020 crore, with new players having to shell out a further Rs 1650 crore on top of the bid amount for the telecom license. International players can also bid for 3G spectrum.

Unlike the private GSM players, BSNL and MTNL are assured one slot in their service areas, but they will have to match the highest bid amount in fees.

But there is more than one catch, especially in Delhi and Mumbai, where the government may be able to accommodate only 3 players initially. This means a heated auction war is likely.

Telecom ministry's decision to open the 3G bidding to international players means that bids will be high and 3G spectrum will not come cheap, forcing even Indian telcos to fork out huge amounts of cash for 3G spectrum. But what could be even more worrying for big mobile operators is the government's decision to ring in number portability, which could increase the churn in mobile subscribers further.

Number portability will allow any telecom subscriber to change his mobile operator, without having to change his mobile number, along with operators. Two clearinghouses will be given license to handle the backend work for number portability. The government promises have the number portability system up and running by next year, especially a boost for all the new entrants in the telecom sector who can now poach subscribers from existing operators.