India kicked off the 3G auction process Monday with a pre-bid conference for potential bidders, with foreign companies conspicuous by their absence.
India’s Telecom Minister A Raja said last month foreign carriers had shown a strong interest in the auction in the world’s fastest-growing market. The names of companies like AT&T, France Telecom and even Google as a technology partner in a joint venture had been doing the rounds.
But if Monday’s event was any indication, foreign telecom operators that aren’t already in the Indian market will not use the auction as a plank to enter.
Entering India’s crowded telecom market through the 3G auction is unlikely to be a profitable option for foreign operators, say analysts. Operational challenges in implementing a 3G network and the difficulties associated with targeting mainly high-end customers initially for these services are likely to keep new entrants away.
Operators like AT&T, BT and Telstra, who acquired licenses when the market first opened in 1994 and later exited, are unlikely to be tempted back.
In addition, delays on the timing of the auction, which has now been pushed back from early December to January 14, and the continuing tussle between the telecom and defense departments over the allotment of spectrum have made investors wary of buying into the 3G spectrum sale.