India is planning to allocate 2G airwaves to successful bidders in its forthcoming 3G spectrum auctions in a move seemingly designed to encourage bids from foreign operators. According to India’s Economic Times, the concession will be included in an Information Memorandum (IM) to be published by India’s telecoms ministry in the next few days. However, the document – which contains details of the long-awaited 3G auctions scheduled for 7 December – adds that the allocation of second-generation airwaves will be “subject to availability.” According to the newspaper, international operators that do not currently have a presence in India have insisted they will not enter the 3G race unless they are allowed to offer fully-fledged mobile services, which would also require 2G spectrum. Some were still not convinced by the latest development. “We will require more information on the terms of the licence and clarity on clauses such as ‘subject to availability’,” an executive with an unnamed international operator told the newspaper.
The issue is complicated by the fact that 2G spectrum in India is in short supply and may require government bodies (such as the defence forces) to release spectrum to enable further allotments. Economic Times notes that there are currently 300 2G applications pending and that foreign operators do not stand a chance if they are asked to join the queue. In another apparent concession to potential foreign investors, the IM document has also called for India’s finance ministry to raise the limit set to fund 3G auction bids via external commercial borrowings (ECB). Earlier this year, the Reserve Bank of India (RBI) had set a limit of US$500 million via ECBs for operators bidding for 3G spectrum.