New Delhi:
On Friday morning, the biggest government auction ever will begin and it's one that will change the lives of millions of people with mobile phones.
The auction is for the high technology 3G systems. All the major telecom players are bidding in the auction and it is expected to raise tens of thousands of crores for the government.
With 3G coming in, you'll be able to watch TV on your phone and get the internet as fast as on your computer at office.
3G is the next big revolution in telecom in India and every big mobile operator - Airtel, Aircell, Vodafone, Idea, Tata Teleservices and Reliance Communications - everyone is desperate to become a 3G operator because it's the only way they can distinguish their product from the rest.
"The 3G licenses are going to be auctioned from Friday morning and the desperate demand is likely to see all records broken. The government may end up with a huge amount of cash. Maybe even up to Rs 50,000 crore," said Martin Pieters, CEO, Vodafone Essar.
"Only the smaller operators may skip this auction. You have to be big to afford these kind of prices for 3G," said Ashish Basil, from E&Y.
The government auction will be unique and a first for India.
- It's a step by step auction and will be done electronically, online.
- The auction will happen simultaneously for all the 22 telecom circles in India.
- The government will fix the price of each 3G license at each stage of the auction.
- The price will be raised by ten per cent, five per cent and one per cent depending on how many players are left bidding.
- It ends once the number of bidders equals the number of available slots.
The main monitoring of the auction will be done from the Telecom Ministry building but since the auction will happen in a virtual world, the bidders will not need to be present physically. Each bidder will log in from their own office and to maintain complete secrecy, no bidder will know the identity of competing bidders at each stage of the auction.
Once the three final winners are known for each circle, it could still take a few months before all parts of India has the flashy new 3G system. The Defence Ministry still hasn't vacated the spectrum in some parts of the country, but by September all of India should be 3G ready.