Should Operators Spend So Much On 3G Licences?

Before India's auction for 3G services has even finished, bids have already surpassed expected limits, with one licence selling for more than three times the base price. For a national licence, requiring concessions for 22 circles, an operator would need to invest around INR134.7bn (US$3bn), just in the licences. While BMI welcomes the prospect of new services being offered in the Indian mobile market, we see the eagerness of operators to get their hands on 3G licences as potentially damaging the operators' finances in the short-to-medium term.

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