Negotiations over 3G continue: The Cellular Operators Association of India (consisting mostly of GSM players) has offered Rs. 300 crore as licence fees for a 5MHz bandwidth for 3G services. TRAI had mentioned that Rs. 85-120 crore is the international price. But what they didn’t mention was that 3G isn’t all that successful everywhere: Operators in Europe paid too much money for 3G spectrum, and even companies who got it free dont think it is commercially viable. In Finland, operators have had 3G handsets subsidised because no one was buying them. In the US, Verizon, Sprint and Singular have spent a combines $10 Bn on establishing 3G networks. But there is hope; from MocoNews:

-€œIt was overhyped at the beginning, and we foundered for a few years, but we are now seeing light at the end of the tunnel,-€ said Vivek Badinrath, chief technology officer for Orange, the France Télécom wireless unit. -€œWe spent a lot of money, but now the enablers are falling into place.-€ -€¦ Even the E-Plus chief executive, Thorsten Dirks, whose company has yet to turn an annual profit from 3G, is optimistic.

For most operators in India, skimming the market seems to be a short-lived exercise - scale will have to come into play sooner rather than later. But if the infrastructural costs of a 3G rollout are high, will the bottom-line conscious operator risk an “affordable” price? That seems to be COAI’s argument as well:

European countries cannot be simplistically applied to India as this would work out to an exorbitant price of Rs 10,000 crore or more, for all-India 5 MHz spectrum. This would make 3G a complete non-starter and completely negate the benefits that the technology can deliverm,” COAI said in aletter to TRAI. [Source: The Economic Times]

Related:
- Moconews: Will 3G ever live up to its hype?
- IHT: 3G cost Billions
- 3G Spectrum Is Not Free For Sure; Only Quantum Of Fee Needs To Be Fixed
- TRAI To Suggest 3G Fee Of Rs 425 Crore Per Circle Per Operator
- GSM Association Plans -€œ3G For All Programme-€, $100-3G Handsets
- TRAI’s Reccos (PDF)