Bids for Rs. 9,200 crore received so far
DELHI: India’s attempt to reboot the telecom sector and address its fiscal deficit woes by holding a Supreme Court-ordered 2G spectrum auction on the eve of Diwali appears to have failed.
Far from the expectation of Rs. 40,000 crore, on Monday, first day of the auction, the government received bids for just Rs. 9,224 crore, displaying weak interest from major players. There was no bidder for a pan-India licence for which the base price fixed by the government is Rs. 14,000 crore. This was Rs. 4,000 crore less than the price originally recommended by telecom regulator TRAI.
The turnout was so weak that only 18 of the 22 telecom circles received a bid. There were no bidders in the Delhi, Mumbai, Rajasthan and Karnataka circles.
The spectrum reserve price was exceeded only in Uttar Pradesh (West) and U.P. (East). Gujarat and Bihar received bids for all eight blocks — each worth 1.2 MHz that were put on the block. Bids were received for seven blocks in Assam, and six in Haryana, Madhya Pradesh, Jammu and Kashmir, the north-east, Odisha and West Bengal. Maharashtra, excluding Mumbai, received bids for five blocks. Tamil Nadu, Kolkata and Himachal Pradesh fetched bids in four slots.
Telecom Secretary R. Chandrashekhar told The Hindu. “Unlike for the Finance Ministry, it is not for us to worry about revenue maximisation. Our role is restricted to fulfilling the mandate given to us by the Supreme Court.”
Spectrum auctions have come on the back of the 2G scam expose, which culminated in the cancellation of 122 licences granted illegally by the then Telecom Minister A. Raja after a year-and-a-half of litigation in the court.
Five companies — Bharti, Vodafone, Idea, Telenor and Videocon — are bidding for the 2G GSM spectrum. There are no bidders for CDMA spectrum.
After seven rounds on Monday, the auction will now continue on Wednesday.
Most of the bidders are members of the Cellular Operators Association of India (COAI), whose secretary general Rajan Mathews said, “We had warned that the high reserve price will result in extremely muted bidding and that is exactly what has happened.”
Sunil Bharti Mittal, who runs Bharti Airtel, India’s largest mobile company, had originally opposed the exceptionally high reserve price and stated last week that the auction would be over on the first day itself because of the high price.
Commenting on the complete washout of the spectrum auctions, the former CEO of Idea Cellular, Sanjiv Aga, said: “The court had said to take spectrum from one pocket and reissue the entire quantum. Now if you have a system by which three quarters [of spectrum] are taken away from auctions, what has been the end of all this? This is not a very desirable outcome.”
Based on the participation on Monday, it is highly unlikely that much will change on Wednesday since 98 of the 170 slots have received bids.
Leading jurist Harish Salve, who represented several companies in the High Court in the 2G case, stated, “There is a prevailing sense of gloom — that everybody who invests in India is open to attack. No one wants to invest in India. There is uncertainty.”
Keywords: 2G spectrum, 2G auction, TRAI, telecom industry
India saw a revolution in telecommunication when cheap telephone reached to the millions of poor people. The report by CAG was a blunder and it owes apology to the nation.
because earlier every one got the licence for free and now no one is
ready to pay for the same thing which they got it for free. when the
govt. called for 3g license it generated 11 billion.
As usual the Govt. will be projected in bad light for the all probable
non fetching of Rs. 1.76 lakh crores by the believers of CAG-media
theory of loss in 2G spectrum. In order to clear the air, the Govt.
instead of fixing the base price at 7 tines, should have rapped in the
CAG, Mr. Swamy, Media, Activists etc. (i.e. the best appraisers on
earth), seeking their opinion on the quantum of base price. The Govt.
should have even invited representatives from the Judiciary and should
have deliberately omitted their usual consultations with the Statutory
authorities. Had it been done like this, these experts would have
ensured the recovery of 'revenue loss' of 1.76 lakh crores and the
entire ministry could have been put behind bar by now. Even after such
an attempt, if the auction doesn't fetch that amount then the Govt.
and the people would have at least a minimum right of seeking the
removal of CAG, closure of obnoxious media houses etc.
There should be a condition put to the interested parties in the auction to give an undertaking that they will not sell the band in the secondary market or tertiary market.
There could be a tacit understanding among different stake holders this time not to take the auction
this is no surprise at all from the zero-hero man sibal.Added to that now he has the infamous PC as FM to "guide".Both will ensure that CAG's figures of loss are wrong & ditch the SC order on auction.
They are here to do yeoman service to our Bharath.
We must have the data of generation which came from cancelled 122
licenses which can be compared with this auction of 2G spectrum. If
this auction can't fetch us over and above the cancelled 122 licenses
then how do we comprehend this "Loss to Exchequer"?? Anyway these days
we are only concerned about the "Loss to Exchequer”, Presumptive or
Actual does not matter. The theory of Loss propounded by CAG and
subsequent theory of Loot propounded by host of media, social
networking site, opposition political parties, and social activist is fueling betrayal amongst common man ever so increasingly so that that
nobody gets to know the real accounting fraud or deliberate policy
derailment. Perhaps this is the reason why this time around the same
corrupt and motivated Govt. of the day has kept the unrealistic high
base price of Rs 14,000 crore, so that they can kill the auction
process once for all and "Loss to Exchequer” can be put to rest
How can government get 1.76lakh crore projected by CAG? This auction outcome would have some implications on forthcoming Court verdit also. All the agencies should evaluate all the possibilities before making any projections, for which knowledgable people from the respective industry view points should be considered prior to the projections and suggections. It appears that the old Telecom policy was good for consumers, but due to corrupt people it becomes a mess.
Well govt need not worry, CAG will pay 1.76 L crores ;)
Seven times higher than the prices you paid in 2008? Earlier you would
have got it for one-seventh of the price. Govt need not step back. Let
BSNL and MTNL use it with support from Govt.
What can the Govt do without any takers? Telecom sector seems to be doomed with the disproportional, unrealistic and irresponsible comments from CAG.
Looking at the way things are going, I dont think there will be any money to 'gulp'
Looks they have formed a syndicate to lower the price. The price shouldn't be lowered, even if there are no bidders. Let it remain like that.
As expected. Government might have bribed industry leaders asking to not to take at base price set and would have agreed to lower the base price at a later stage following the logic "Less demand, Less price" !
All the telecom companies are in tandem to force government to reduce the price. It shows the power that industry exerts on government decision. Is it a healthy competition or market practice which the supporters of market often talks about ? same thing could happen in the retail market if the sellers choose to establish an oligopoly.
I wish,soon the darkest days of Indian Telecom industry will be over and our jobs be more secure.All the operators who come after this auction will sustain in market as a long term players and will have their shares of profits in the market and eventually the employees can relax and be sure of their job after their hardwork.
We wish &pray god, this time the auction amount is not gulped by anyone
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