3G spectrum auction soon, but no orders for equipment

By Pupul Dutta, Gaea News Network
Tuesday, January 27, 2009

NEW DELHI - Though the third generation (3G) mobile spectrum auctions may happen anytime soon, the final rollout of services will likely be delayed in the long run. The reason: private telecom operators have not yet placed any orders for new equipment with the vendors.

According to industry officials, operators are wary about committing fresh investments, which have to be firmed up on the basis of the final spectrum price that will only be known after the 3G auctions.

‘Bharti and Vodafone have calculated their infrastructure requirement but have not placed any order as the companies are still waiting for the policy (auction timeframe) to be announced,’ Bharat Bhatia, president of Telecom Equipment Manufacturers Association of India (TEMA), told IANS here Wednesday.

‘Telecom operators do not have an idea how much the spectrum will cost and probably that is one of the reasons why they are refraining from placing orders,’ he said.

Echoed Sandeep Bhargava, corporate affairs head (Asia and Pacific region) of Nokia Siemens Networks: ‘The spectrum pricing is a major concern for all telecom operators and this is certainly deterring them from placing any order in advance.’

Nokia Siemens Networks is the telecom equipment manufacturing arm of global mobile handset manufacturer Nokia.

According to Bhargava, delivery of equipment, which will have to be imported, ‘typically’ takes between eight to 12 weeks. The equipment includes telecom switches, optical fibre cables, and equipment needed for base stations.

Any delay in placing orders is likely to delay the rollout of services as well, though there is no deadline for rolling out 3G services.

Players eyeing the second generation mobile segment are in a similar situation as well. An industry official, requesting anonymity, said even new operators like Swan Telecom and Unitech Wireless have not placed any order with equipment vendors.

The official said these operators lacked the necessary funds needed to purchase the equipment required to put in place the infrastructure for the rollout of services.

Norwegian telecom major Telenor, which is in the process of completing acquisition of a 60 percent stake in Unitech Wireless, has announced it will infuse funds using a combination of internal resources and debt.

Both Swan and Unitech had received licences for second generation (2G) mobile telephony last year. However, neither has rolled out services so far despite the spectrum being allotted to them.

Filed under: India, Mobile Phone

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