Days after the auction of mobile phone spectrum evoked a tepid response, Planning Commission Deputy Chairman Montek Singh Ahluwalia on Wednesday said it was a “mistake” to have a high reserve price and there was need to relook at the price during the second auction planned later this fiscal.
Mr. Ahluwalia, who was part of an Empowered Group of Ministers that set Rs. 14,000 crore as the base price, said the government which plans to have another auction soon for the unsold spectrum, needs to take a relook at the price.
“I myself had raised the issue that it was a mistake to pitch the reserve price at a level close to that...” he told reporters in New Delhi. “I think in the hindsight it was clear that the reserve price was too high”.
The government, which had set a reserve price of Rs. 14,000 crore for pan-India spectrum broadly drawing from the basis used by CAG in calculating the loss in the previous sale in 2008, managed a meagre Rs. 9,407.64 crore in the auction that lasted barely two days.
“But that doesn’t matter, we are going to re-auction and you will discover the price,” he told reporters on the sidelines of Indo-Japan symposium in New Delhi.
Mr. Ahluwalia said several discussions were held to set the reserve price for auctioning the spectrum and the EGoM had “actually lowered the reserve price” from Rs. 18,000 crore suggested by sector regulator TRAI to Rs. 14,000 crore.
“I want to mention here that one or two newspapers criticised that as if by lowering the reserve price we are going to reduce the outcome. I had argued very strongly that a healthy auction process will discover the prices whether you fix it at one or two or seven hundred,” he said.
Keywords: 2G spectrum, 2G auction, telecom industry, spectrum bidding, Montek Singh Ahluwalia, reserve price, 2G re-auction, TRAI
If the Govt and TRAI feels that the reserve price fixed by them is fair and only the Private players are trying form a group and prevent healthy bidding, why not BSNL bid for the entire spectrum range and bag it and offer services thereby driving the greedy private parties out of the fray.
This way you can get the private players to come up with a meaningful price which some were ready to offer in 2008. Instead of investing the Pension funds in share market, this investing in such avenues would be in the interest of the nation and its pensioners.
If the reserve price is lowered, it should be with the proviso that no
successful bidder shall be allowed to off load spectrum allocated to it
to third parties at higher price.
This man has again opened his mouth and shot off something which makes no sense. The reserve price is not too high. The telecom companies are only cartelling to lower the price and this man seems to be collaborating.
It is better to remain silent and be thought a fool than open one's mouth and leave no doubt-Abraham Lincoln.
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