NEW DELHI: Stung by criticism from a wide range of stakeholders, with the finance ministry the latest to join the attack on Wednesday, the DoT is preparing to review its 3G guidelines within two weeks of its announcement. The finance ministry has accused DoT of violating due process and subverting explicit Cabinet decisions on inter-departmental approvals for policies that have a revenue impact.

In a stern letter, finance secretary, Subbarao, has rebuked the telecom ministry for being in a rush to announce half-baked guidelines. "We are not shy of making changes if the finance ministry believes it is required. Although we have consulted them throughout the process of finalizing the guidelines," a senior DoT official told ToI. However, telecom minister, A Raja told a television channel on Thursday that there would be no change in the policy as the finance ministry had been consulted at every stage. While announcing the guidelines on August 1, Raja had promised a yield of upto Rs 40,000 crore from the sale of spectrum.

India is the world's fastest growing mobile market, projected to double its subscriber base to 550 million by 2012, which explains the attractiveness of 3G spectrum. However, the 3G guidelines disappointed its most important stakeholders global operators and new entrants, existing GSM operators, Trai and even the finance ministry. With global companies turning their backs on the auctions, revenue receipts are likely to be less than half this target, given a reserve price of Rs 2,020 crore for 5 MHz of 3G spectrum.

For the fastest growing telecom market to earn the least from 3G spectrum sale threatens to seriously beat down the government's global image at a time when the finance ministry is groping for ways to rejuvenate investor interest and revenue receipts. While acknowledging that a policy review looked imminent, the DoT official said, "We will send a reply to the finance ministry rejecting the allegations.

In November 2007, the Telecom Commission - which has inter-ministerial representation - approved the 3G policy. Additionally, a committee headed by member-finance, DoT has been formed, which can address any concerns of the finance ministry. The finance ministry is well represented in this committee." Apart from the finmin, telecom regulator, Trai also wrote a scathing letter to DoT on August 8, pointing out as many as six shortcomings with the 3G guidelines.

It told DoT it could not modify the unified access service licences for new 3G entrants without seeking Trai's recommendations. "We may not respond to Trai as no modification of licences has taken place, as it alleges. I am perplexed why Trai keeps writing to us," the DoT official said. Till the 3G guidelines were announced, it was expected that international bidders would be the first to queue up for 3G spectrum.

However, global operators interest quickly turned negative owing to multiple and discriminatory regulatory and financial barriers. A Rs 1,651 crore additional payment to secure a universal access licence without 2G spectrum and M&A barriers that block their entry into 2G post a win in the 3G arena are just some of the issues. Uncertainty regarding 3G spectrum beyond 5 MHz, coupled with missing bid-critical information are others.

GSM operators criticize the guidelines for favouring CDMA operators, alleging that CDMA firms have a much lower entry point of Rs 505 crore versus their Rs 2,020 crore since CDMA operators can obtain blocks of 1.25 MHz instead of 5 MHz. Also, CDMA firms are allowed to obtain spectrum under multiple bands, unlike GSM operators