The Indian government is to issue guidelines on the auction of 3G and WiMAX network licences next month, according to telecom minister Andimuthu Raja.

Speaking at a recent industry conference in Delhi, Raja said the licence conditions would allow for foreign participation. Under Indian law, up to 74 per cent of an Indian company can be held by a foreign company.

The Indian government expects the rollout of WiMAX and 3G networks to start by January 2009; it has also set a target of 20 million broadband subscribers by 2010. The country currently only has around 4 million broadband subscribers.

The initial WiMAX plans laid out by the Indian government include the auction of three 2.5GHz WiMAX licenses with a 10MHz allocation each for the winners. State-owned BSNL has already been handed 20MHz of spectrum in the 2.5GHz band for mobile WiMAX rollout.

It is still not clear whether the 2.5GHz licence winners will be able to offer mobile services or not. However, the new guidelines should clarify this issue.

Despite all the WiMAX optimism displayed by the Indian government, Gartner is downbeat on the technology’s prospects in the country. In a recent report entitled “Beware of WiMAX Hype in India”, Gartner forecast there would only be 6.9 million mobile and fixed WiMAX connections in use in India by the end of 2011. Of that number, Gartner estimates the overwhelming majority will be for fixed and nomadic applications.