Wither 3G?

It has been over a month since the original auction date of the 3G spectrum license (and that of defunct Instaphone licence) passed by. PTA, the executor of the potentially billion dollar transaction remains lapsed into nirvana. By all means, there is very little probability of the auction to be completed within this fiscal year.
To evaluate the prospects of the 3G auction in the near future, it is instructive to first narrate the possible causes of the delay. Sources having knowledge of what had transpired in the pre-auction phase till the whole process hit snags in February cite both procedural and political underpinnings to the delay.
The appointment of independent consultants, who would advise PTA on the transaction modalities, has been cited as the procedural cause of the delay. The Auction Supervisory Committee (ASC), formed by the PM and headed by the then finance minister (now advisor finance, Mr. Hafeez Shaikh), had mandated PTA to conduct the auction transaction in view of the 3G Policy approved earlier.
Sources believe that initially there was an understanding to get the clause in the PPRA Rules, concerning the appointment of independent consultants, waived off. This would have been done, supposedly, to complete the auction as early as March end this year, which would have raised sizable finances for the government to curtail its fiscal deficit.
And then the politics crept in. Soon after the PTA published the two auctions Information Memoranda in January, the opposition MPs started raising objections over the auctions base price, technology-neutrality and payment. This, and the February 2 ruling of the Indian Supreme Court which cancelled 122 telecom licences on grounds of under-pricing and alleged corruption, forced the officials at home to tread cautiously.
But, that is not all! During the same timeline, Pakistans Supreme Court initiated contempt of court proceedings against the Prime Minister in the NRO verdict implementation case. In the ensuing weeks and months, the legal noose was tightening around the PM, who also happened to be the IT Minister.
Sources maintain that the ASC deemed it fit not to
ush into things or to further the controversy by going into the 3G auction whose modalities were already under question. Hence, it decided to fulfill the procedural requirements, including appointment of the consultants. This essentially delayed the two auctions, with a wait and see approach towards the PMs court case. Interestingly, it was only the PTA which looked bad in this entire saga.
Whether the 3G auction will be conducted in the near future is a big question mark, as the telecoms regulator is yet to hire the consultant. Reportedly, the ASC is not satisfied with the PTAs short listing of candidates, which means this preliminary phase will likely drag on. After the appointment, the consultants will take their sweet time hammering out the auctions modalities afresh.
Coming months bear the ominous signs of political strife and legal gridlock as the PM is defiant in the face of questions over his constitutional status following the SCs Thursday verdict. If that wasn enough, imagine the signal that has been sent to foreign investors and local operators with the recent appointment of Raja Parvez Ashraf as the Minister for IT and Telecom. Parvez Ashraf is awaiting accountability investigations for his alleged role in the Rental Power Plants case.
If the situation deteriorates, many observers suspect that even FY13 is a long shot for the incumbents to complete the 3G auction in. Hence, the likelihood of a prolonged delay, until a fresh government takes charge, cannot be ruled out.