The 3G and broadband wireless access spectrum auction is running into further controversies with a section of telecom firms opposing the timing of the auction and internet companies planning to move the Prime Minister's Office.

Even though Reliance Communications [Get Quote] is ready with $1-billion investment for 3G rollout, it intends to focus on GSM rollout at the moment. The company is "receptive to the opinion that the 3G auctions should be held at a later date," a source close to the development said.

This follows a similar move by Vodafone-Essar. The GSM major had earlier written to the Department of Telecommunications seeking postponement of 3G auctions. The company had said the global financial crisis would make mobilising funds an "extended process".

Gartner Principal Analyst Naresh Singh said: "The financial crisis shouldn't be a concern as the reserve price of Rs 2,200 crore is not too high for any of these companies. The 3G spectrum auction has already been delayed and the industry wants the government to go ahead with the auction. Moreover, a cash crunch in the industry will lead to more realistic auction bids that will be beneficial to the customer."

Meanwhile, the Internet Service Providers Association of India plans to move the PMO over the telecom ministry's move to seek surrender of the earlier-issued BWA spectrum.

"BWA spectrum was allocated to five internet service providers in the country and these firms have been paying for it for the last couple of years. Now the ministry wants us to surrender it and participate in the forthcoming auction," ISPAI President Rajesh Chharia said.

This, say companies, is not viable as there is no clarity on the issue. ISPAI had taken up the issue with the Telecom Regulatory Authority of India and the telecom ministry "unsuccessfully". "We are not seeking postponement of the auction but we want to know whether our members will be allocated the same amount of BWA spectrum and at the earlier price," Chharia said.