Breaking the suspense, the Telecom Regulatory Authority of India (TRAI) announced a roadmap for third generation (3G) mobile services to start next June, but Minister for Telecommunication Dayanidhi Maran said that he will formalize a report in 3 months. 3G services allow service providers to offer productivity enhancing and entertainment over mobile phones such as streaming video, data-intensive applications such as stock transactions, e-learning, telemedicine, etc.

Maran says that the TRAI recommendations need detailed examination before a “formalized report” to “enable faster roll-out of 3G services” is made available. Maran’s concerns are more to do with creating the right pricing structure for the limited spectrums carrying 3G services which will also alleviate the ballooning fiscal deficit.

TRAI Chairman Nripendra Misra said his independent body has recommended that the nation allow 8 operators with nationwide rights. The base price recommended for a nationwide operating license is Rs. 1,400 crore (USD 304 million) based on dividing the nation into 23 telecom circles categorized based on usage and consumers spend patterns. Therefore, New Delhi and Mumbai as categorized ‘A’ which would cost Rs. 80 crore (USD 17 million), Chennai and Kolkatta as ‘B’ to cost Rs. 40 crore (USD 8.5 million), and rest in ‘C’ category to cost Rs. 15 crore (USD 3.2 million). Surprisingly, the recommended pricing is much lower than those charged in Germany and UK but then technology and services adoption is much higher in those countries and in relation to earning capacities. There is no pricing review mechanism that has been included in the recommendation.