The department of telecom (DoT) is under pressure from the finance ministry to complete the process of auction of third generation (3G) spectrum by December.

“As per the tentative schedule, the auction is likely to get completed by January 15, 2009. This may be compressed by a couple of weeks so as to complete the process by December or early January,” the department of economic affiars secretary Ashok Chawla said in a letter to DoT secretary Siddhartha Behura.

Though the finance ministry letter does not give any specific reason for asking the department of telecom to rush the auction, senior government officials say that the objective could be to pump more money into the economy.

It is expected that the government would rake in Rs 30,000 crore to Rs 40,000 crore from the 3G spectrum auction.

The recent amendments in the guidelines for raising foreign commercial debt, specifically providing for contracting external funds by companies to pay for the 3G auction, should provide enough relief to potential bidders to make credible and competitive bids, he said in the letter dated November 3.

The UK-based telecom major, Vodafone, had reportedly written the to department of telecom asking for a delay in the auction process.

In a related development, communications and IT minister A Raja on Tuesday said the process of allocation of 3G airwaves would be completed by January next year.
Although the global economy was in a recession, its impact on the telecom sector had been comparatively less, Raja added.

The letter further said the issue of inadequacy of spectrum in nine circles and the need to “re-farm” the broadband and wireless spectrum should be resolved in the next meeting of group of ministers (GoM), headed by external affairs minister Pranab Mukhejee.

If the issues were not resolved, there might be no option other than putting the bidders on a wait list in respect of circles where it was not possible to allot the entire 30 MHz of 3G spectrum immediately. In that case, the successful bidders might be asked to deposit only 25 per cent of their bid amount if they wished to be on the wait list, the letter said.

DoT is waiting for the defence ministry to release spectrum in these nine circles, which include Delhi.