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India to allow global auction for 3G spectrum

NEW DELHI - The Indian government on Friday announced it would hold a global auction for licenses to offer third-generation (3G) high-speed wireless services, news reports said.

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Communications and Information Technology Minister Andimuthu Raja said up to 10 players, including eligible foreign operators, would be permitted in the 3G space, the PTI news agency reported.

The 3G technology allows faster downloads of video and music, and the auction would see India join several other countries in providing the latest telecommunications services.

Operators would be exempted from paying any annual fee in the first year of operations, but they would have to pay 1 per cent of their adjusted gross revenue as an annual spectrum charge after one year, the report said.

Local media reported that the Indian government hopes to generate revenues from 7 billion to 9 billion dollars through the 3G auction.

India is the world's second-largest phone market after China with more than 261 million users, but industry experts said telecommunications services have yet to penetrate vast stretches of its rural areas.

After undergoing rapid growth, the Indian telecommunications sector is gradually entering a phase of consolidation, which is likely to involve competitive pricing, strategic manoeuvres and market expansion.