Initial response to India’s 3G spectrum auction was cautious. On the first day of bidding (on April 9) the price for pan India 3G spectrum was only 12 per cent higher than the reserve price of Rs 3,500 crore. On the second day of bidding the price went up by only 4% of first day’s closing price.

However, Union Communications Minister for Communications and IT, A. Raja was confident that the momentum of bidding would pick up in a few days. In his first ever interview when the biding started, Raja tells TelecomTiger that he still believes that the government could raise up to Rs 45,000 crore. Excerpts:

Q: Why is the response to 3G spectrum biding is lukewarm?

A: I do not believe that response to 3G spectrum auction is slow. Initially, all the players have to be cautious. But there was always spirit of motivation among the players. You will see the momentum picking up as the auction progresses.

Q: So what would be the final pricing?

A: I do not want to guess that but I believe that the government would be able to get much more than Rs 35,000 crore, which was initial target. The government can get up to Rs 45,000 crore.

Q: This is possible if one pan India slot for 3G spectrum of 5MHz is sold for Rs 9,000 crore. Do you think the business would be viable if the spectrum pricing is so high?

A: When the companies bid they know what their business plan is. I can only say that there would be a great demand for 3G services. In 1995, when the spectrum for 2G services was auctioned, it was difficult to believe that mobile phones would become necessity and India would be able to achieve 500 million phones in just 15 years. Similarly, today I can guess what would be the demand in future for 3G services.