Wireless licenses will be auctioned, and the process is expected to be completed three to four months from now, which means that the commercial launch of 3G services would happen by 1H09. To start with, the Department of Telecom would permit up to five operators in each circle to operate. However, the limit is three for metros like Delhi and Mumbai. Government-owned service providers Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL) will each receive a license, gaining a head start of several months over competitors in rolling out 3G services. The license has been allocated to BSNL and MTNL with only one condition: The license fees must be equal to the highest bid made during the auction of licenses. This allocation has given them the advantage in terms of time to market versus the private operators. One could expect, for instance, that MTNL will launch service within four to five months. The government's surprise announcement heartened CDMA operators that worried that the guidelines would only cover GSM services in the 3G market. The GSM version of 2G services here were launched about three years before CDMA. At least two CDMA operators will be allowed to offer 3G services in each license area. The licenses will last 20 years. Spectrum for EV-DO data services will be auctioned in the 450MHz and 800MHz bands, and eventually in the 1,900MHz band, the statement said. Auctions will be overseen by an agency to be appointed by the Indian government.

3G services are all set to give a boost to the value-added service industry in India, which Gartner estimated was standing at about US$1.5 billion in 2007. Going ahead with Gartner estimates, by 2012, every fifth wireless connection would be on 3G and the operators can expect to generate nonvoice revenue to about US$5.5 billion.