The Department of Telecommunications (DoT) has approached Union Law ministry to get legal aid on the issue of increasing base price for 3G and broadband wireless access (BWA) spectrum allocation.

Interestingly, the telecom department is not is the favor of increasing base price of 3G spectrum as it can discourage companies to participate in the auction process. Low participation by companies may decrease competitiveness that can lead to significant losses to state exchequer.

DoT wants to clarify whether it needs regulator's approval, under section 11 of the TRAI Act, to change reverse price of spectrum allocation. TRAI had recommended reserve prices of Rs 80 crore for circle A, Rs 40 crore for circle B and Rs 15 crore for circle C in September 2006.

However, the finance ministry asked to increase reserve prices for an all-India 3G licence as the market prices should be much higher than proposed by telecom authorities.
 
The auction process may further delay as Union Law Ministry may take some time to extend its advice. 3G auction process was earlier scheduled on January 16 and may be postponed to January 31. The official website of DoT states that it would put new auction schedule after getting legal advice from law ministry.

Experts believe that GSM or CDMA technology players also want delay in auction process for 3G spectrum allocation as they are facing serious liquidity problem right now.