The government on Monday received bids worth Rs 9,200 crore on the opening day of the auction for 2G mobile phone spectrum, which drew a lukewarm response due to high base price.
|The government received bids worth Rs 9,200 crore on Day 1 of the auction
Of the 22 telecom circles, bids were received for 18 circles, with Delhi, Mumbai, Rajasthan and Karnataka, which had the highest base price, finding no bidders.
The government had set a starting price of Rs 14,000 crore for 5 megahertz of GSM airwave space in all of India’s 22 telecommunications zones.
Sources said the auction has drawn scant interest as the base price for bidding is more than seven times of what the telecom companies had paid in 2008. Cellular Operators Association of India (COAI) said it would be surprised if the process went on for more than a day or two.
“The limited amount of spectrum, contrary in our opinion to the Supreme Court ruling, was guaranteed to have a very detrimental impact on the auction,” said COAI General Secretary RS Mathews.
Sunil Bharti Mittal, chairman of Bharti Airtel, the nation’s largest telecom company, had last week predicted that the auction would be over on the first day itself because of the high base price.
“The total quantum of revenue bid is for a little over Rs 9,200 crore,” Telecom Secretary R Chandrashekhar said. The bids received so far are a far cry from the Rs 28,000 crore revenue that the government is expecting from the auction of wireless spectrum reclaimed after the Supreme Court cancelled 122 permits issued in 2008.
Bharti Airtel, Vodafone, Idea Cellular, Norway's Telenor and Videocon are bidding for GSM, but there are no bidders for the CDMA spectrum after Tata Teleservcies and Videocon pulled out of the race.
Chandrashekhar said that in the 176 blocks of spectrum that were put on auction, bids were received only for 98. Out of 22 circles, the demand for spectrum has crossed the offer only in Uttar Pradesh (West) and UP (East). Gujarat and Bihar received bids for all 8 blocks (of 1.25 MhZ each) that were put for auction.
The 22 circles into which India has been divided are West Bengal, Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Kerala, Madhya Pradesh, Maharashtra, North East, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh (West), Uttar Pradesh (East), Delhi, Kolkata and Mumbai.