The much-awaited 2G auction, slated for November 12, promises to be really exciting with Mr Mukesh Ambani’s Reliance Industries expected to enter the fray. The government has announced the terms and conditions for foreign players wanting to enter the auction while existing players will be given spectrum in the 1800 MHz band and will have to return their present holdings in the 900 MHz band.
The big players already in the field are protesting what they call a high reserve price of Rs 14,000 crore, which seems strange considering that they have to pay it over 12 years. After paying the first instalment, of around Rs 5,000 crore, they get a moratorium of three years and start annual payments of around Rs 1,500 crore after that. One does not know why the protests, considering that they have already increased their prices by 30 per cent this year. For each 10 per cent increase the industry gets around Rs 20,000 crore if one makes a rough estimate of the industry’s revenue at Rs 2 lakh crore.
Reliance, which is expected to bid for spectrum, could set the benchmark price as it wants to be a full-time player. It could create a flurry in the market by bringing down tariffs through plans like its “Monsoon Hungama”. The rest of the industry will then have to fall in line. Though India is said to have one of the cheapest rates, customers elsewhere have better packages.