The 3G scenario in the country especially with respect to entry of private players hangs in balance. But nevertheless, it will be interesting to know the likely estimates each circle will command for the frequency blocks available.

Ambit Capital, estimates in its Telecom Ector report for 2009 that Delhi will emerge out to be the highest priced circle with likely bid amount in the range of $ 128 million (Rs 6400 million). Next to follow will be Mumbai at $ 112 million (Rs 5600 million). The reason for high price point in Delhi maybe due to the fact that there are only two blocks available for auction which may result in competitive and aggressive bidding.

Other circles with high auction price include Gujarat at $ 104 million and Andhra Pradesh, Karnataka, Maharashtra as well as Tamil Nadu at $ 80 million.

The total revenues to government are estimated to be $ 969 million which is roughly three times as compared to the base price of $ 382 million.

Ambit Capital has calculated the estimated price by taking into account, current reserve price and number of blocks in each circle as announced by DoT. The multiple for each service area is a function of number of blocks available, the subscriber quality index (indicating revenue generating capability of the circle, factors in revenue contribution from the circle and subscriber base), mobile penetration in the circle and ARPU. It maybe remembered that the final decision on the base price is yet to be taken by the government as well as the number of blocks to be made available. So, the estimates by Ambit can change depending on future changes on these two parameters.

Bharti Airtel, Vodafone, RCom and Idea are expected to emerge strong players in the 3G landscape predicts Ambit. Airtel and RCom will have capex of $1.2 billion each for the next five years over 3G services. Idea will have around & 800 million capex. Ambit expects operators to rollout 3G services at moderate speed.

3G subscriber base is estimated to reach 148 million by FY11.

The report also highlights some other important developments in 2009 like implementation of MNP and the resultant impact on the market scenario. It says competitive tariffs will put further pressure on the margins of operators. The entry of new players will result in market consolidation after three years.