India's Government to Reap New Broadband Bonanza

Fresh from its 3G spectrum auction windfall, the government of India stands to rake in another tidy sum from the auction of wireless broadband Internet.

The bidding began for the wireless-broadband airwaves auction last Monday. Bid prices for one slot covering the whole of India have sailed past expectations-more than triple the starting price. The starting price for one slot for offering services nationwide was 17.50 billion rupees. The government is auctioning two bandwidth slots for broadband services in each of the country's 22 service areas. If it goes on like this, the government stands to earn 188 billion rupees (about $4.1 billion) from the auctions, up from an original target of around 150 billion (about $3.3 billion), says analyst Harit Shah of brokerage Karvy Stock Broking in a note. That would add to the 677.19 billion rupees ($14.6 billion) the government earned from the top dollars paid by the country's telecommunications firms for 3G services in the world's fastest-growing telecom market. The participants in the broadband wireless auction are the usual big Indian names: India's Bharti Airtel Ltd., Vodafone Essar Ltd. and Idea Cellular Ltd. They are joined by other prominent bidders such as U.S. chip maker Qualcomm Inc., which is looking to tie up with local partners to build a network if it becomes successful.