Finance Ministry, DoT lock horn over 3G policy

NEW DELHI, INDIA: The much-awaited launch of the 3G mobile telephony services in the country may be delayed further as the Finance Ministry has criticized the Department of Telecommunications (DoT) for announcing 3G guidelines without consulting the financial implications of the guidelines.

The Finance Ministry, in its letter to the DoT recently, also pointed out that as per a Cabinet decision on October 31, 2003, the Finance Ministry and the DoT have to mutually decide the spectrum pricing. The present move on the part of the DoT is contrary to that decision the Ministry said.

“The issuance of (3G) guidelines without any consultation with the Finance Ministry, either within the forum of Telecom Commission or outside, is inappropriate and contrary to the Cabinet decision,” said the Finance Secretary’s communication.

As per the Transaction of Business Rules 1981, it is mandatory to consult with the Finance Ministry in respect of all issues, which have financial implications, it pointed out. The Ministry also suggested that a consultative meeting with the Ministry be held to get the requisite approval before finalizing the 3G policy.

Communications Minister A Raja had lifted the curtain on the 3G policy on August 1, saying it would auction five to ten 3G licences per service area. Without waiting for the auction the minister had also issued 3G licences to BSNL and MTNL.

It has been scheduled that the 3G spectrum auction would be held within three months and the spectrum allotted by the year-end. The Department was planning to launch the service by mid-2009.

However, the present roadblock raises doubts whether it could move ahead as per the schedule.

Responding to the Finance Ministry’s criticism, the DoT officials claimed that the Communications Ministry had several rounds of meeting with the Finance Ministry before announcing the 3G policy guidelines on August 1. The officials said it was according to the insistence of the Finance Ministry that the base price and the spectrum charges were revised upwards.