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Govt to accept mobile licence bids on Thursday

The government will accept final price bids from private telecom companies for new mobile licences as planned on Thursday but these will be opened only later, a government official said on Wednesday.

The government is holding the third and final round of price bidding on Thursday for private firms that want to be the fourth cellular operator in India's 21 telecom zones. The licences are expected to be awarded by the end of August.

"We'll only accept the financial bids as planned tomorrow (Thursday). We'll not open it," the telecoms ministry official, who did not wish to be identified, told Reuters.

The bidding process received a serious jolt on Tuesday after the Bombay high court on Tuesday temporarily barred the government from deciding on the licences.

The court, hearing a petition filed by an employees union of state-run telecom giant VSNL, a monopoly overseas telecoms operator and India's biggest Internet access provider, also ordered that the company can bid for the licences.

The government official said a team of telecom ministry officials would leave for Bombay late on Wednesday to ask the court to rescind the order.

The official said although the government was yet to see the order, it did not want to "antagonise the court" by announcing the results of the last round of financial bidding.

The government had earlier disallowed New York Stock Exchange-listed Videsh Sanchar Nigam Ltd from bidding for the mobile licences, saying its rules did not allow competition between state-run firms in the business.

Two other state-run companies Mahanagar Telephone Nigam Ltd and Bharat Sanchar Nigam Ltd can operate mobile services.

The court decision caught the mobile industry by surprise coming as it did when the auction had entered its last lap.

Leading private telecoms group Bharti Enterprises and the Indian unit of Hong Kong's Hutchison Telecom were among the frontrunners in the race to win the licences.

Six private groups including petrochemicals and refining giant Reliance group, Birla-AT&T Communications and a unit of tractor-maker Escorts Ltd had bid for the licences.

The auction offers telecom firms probably their last chance to enter or expand their presence in the high-profile business.

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