WiMAX supporters may well have breathed a sight of relief this week as India’s Department of Telecommunications (DoT) rejected a proposal by the finance ministry to double the reserve price for a pan-Indian WiMAX licence.

If the proposal had been accepted, bidding for a pan-Indian WiMAX licence in the 2.3GHz and 2.5GHz frequency bands would start at a hefty Rs 2,020 crore ($460m). The reserve price for a pan-3G licence would also double to Rs 4,040 crore ($920m) under the finance ministry’s proposal.

DoT calculates the base price of a pan-WiMAX licence at 50 per cent of the base 3G licence cost on a per MHz basis.  According to local press reports, DoT was reluctant to raise the 3G licence reserve price ahead of the auctions as it would dampen interest from foreign players, which had already been cool prior to the finance ministry’s price hike proposal. The higher licence prices would also no doubt result in higher prices for consumers, something that the DoT wants to avoid.

Tighter economic conditions around the world is, of course, another argument not to raise the reserve price.

The spectrum auctions are scheduled for 30 January but the DoT, says Shyam Kaushal, India’s regional director for the WiMAX Forum, is still awaiting a response from the Cabinet Committee of Economic Affairs to approve some “key factors’ in the auction policy. “This may slightly delay the auction,” he says.