2G auction a flop, no bids for many circles
The 2G spectrum auction’s first day saw a tepid response from telecom firms, with no bids for the Delhi, Mumbai, Karnataka and Rajasthan circles. There was no bid for pan-India spectrum. Seven rounds of bidding took place on Monday.
Industry analysts blamed the high reserve price for the poor response. “The total quantum of revenue bid is a little over `9,200 crores (after the fifth round),” said telecom secretary R. Chandrashekhar. The government hoped to generate `40,000 crores from the auction.
It seems only 55 per cent of the total spectrum put under the hammer received bids. Of 176 blocks, there were bids for only 98 blocks, sources said. The bidding will continue on Wednesday if required.
Five companies have applied for GSM spectrum auction — Bharti Airtel, Idea Cellular, Vodafone, Videocon and Telewings Communications (whose major stake is held by Norway-based Telenor).
Bharti and Vodafone seem interested in excess spectrum only in some circles. It seems Telenor, whose licence was cancelled by the Supreme Court, is also not looking for spectrum on a pan-India basis. Idea Cellular, set to lose seven of its licences after the Supreme Court ruling, has to win them back to retain its pan-India presence.
After the seventh round, Tamil Nadu spectrum was the most expensive, with winning bid at `306 crores. The government had fixed the reserve price at `14,000 crores for 5 Mhz GSM spectrum on the pan-India level.
The 2010 3G auction had raised `1 lakh crore revenue for the government. Telecom analyst Kunal Bajaj blamed the high reserve price. “At this price it didn’t make a business case for a teleco to bid,” he said.
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