Communications Minister Andimuthu Raja said: "We expect competition will be as high as that for the 3G." There are 11 bidders including the main cellcos - Vodafone, Bharti Airtel, Idea Cellular and Aircel - plus Qualcomm, Tata Communications, Wimax start-up Augere, Infotel Broadband Services, Spice ISP, Tikona Digital Networks and Reliance Wimax.
As just 1% of Indians have internet connections and fewer than that have broadband, the opportunity is huge, Shobhit Agarwal, director of Protiviti Consulting, told Reuters. He calculates that an operator could gain a "decent return" in this price sensitive market with license fees of 1.5 to two times the starting bid price, if the subscriber base reaches 100 million by year five or six. Higher license fees would "stress the business models of the service providers and have a significant adverse impact on the return numbers," he added, but given the number of contenders, prices could indeed go very high. Ernst & Young said it expected prices to reach 3-4 times the base price.
[This article originally appeared in Rethink Wireless]