The first-ever auction of the radio frequency spectrum for third generation (3G) telephony that would facilitate high-speed mobile services in India began Friday.

As many as nine telecom companies — Bharti Airtel, Reliance Communications, Vodafone Essar, Idea Cellular, Tata Teleservices, Aircel, Etisalat, S Tel and Videocon Telecommunications — are participating in the online auction process which will be held from 9 a.m. to 7.30 p.m. on all days, except Sundays and national holidays.

Bharti Airtel, Reliance Communications, Vodafone Essar, Tata Teleservices, Idea Cellular and Aircel are bidding for all-India spectrum, while Videocon, S Tel and Etisalat are bidding only for selective circles.

It is a simultaneous auction of 22 service areas over a secure website on the Internet. The auction has multiple rounds.

During the e-auction, the telecom operators will have to match the base price, set at Rs.3,500 crore for one 3G slot by the government.

At each round, the price would be hiked from anywhere between 10-1 percent over the previous round’s price depending on the demand.

Till 1.00 p.m., the first round of e-auction had been completed, according to sources.

The auction will end when demand is equal to the number of slots available in each service area.

According to a senior DoT official, it is difficult to set a time-frame for the 3G bidding.

“It may take even a month,” the official said.

The bid data will be made public after the auction is completed. The winning firms will have to deposit the money within 10 days after the auction.

The successful bidders would be allowed to offer 3G services on a commercial basis from Sep 1.

According to the Notice Inviting Applications (NIA) issued in February, of the 22 telecom circles, five states – Punjab, Bihar, West Bengal, Himachal Pradesh and Jammu and Kashmir – will have four private players for the auction.

Other circles, including the four metros of Delhi, Mumbai, Kolkata and Chennai, will have three private players.

The number of slots up for grab exclude those allotted to state-run Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd, which were allotted licences last year and have since started offering 3G services in their operating circles. But they will have to match the price paid by the highest bidder in their zones.

The 3G telecom services will allow faster connectivity than what is available now and enable applications such as internet TV, video-on-demand, audio-video calls and high-speed data exchange.

For broadband services, the auction will begin two days after the process concludes for 3G spectrum.

As many as 11 companies — Bharti Airtel, Idea Cellular, Aircel, Augere Mauritius Limited, Infotel Broadband Services, Qualcomm, Reliance WiMax, Spice Internet Service Provider, Tata Communications Internet Services, Tikona Digital Networks and Vodafone Essar — will bid for broadband wireless access (BWA) services.

The government has set Rs.1,750 crore as the base price for a BWA slot.

The Centre hopes to garner Rs.45,000 crore from these auctions.

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