2G no-show good for customers

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While the flop 2G auction may not be good for the government, it may turn out to be a blessing for the consumers as mobile operators may not raise tariffs aggressively .

“If the companies had over-bid, there would have been an impact on the consumers. The companies would have had to hike tariffs as their bottom lines are under pressure and an over-bid would have raised debt,” said an analyst.

However, Mahesh Uppal, director of telecom consultancy ComFirst India believes that firms still paid high prices for spectrum.

“It could have been worse. But even now, the pressure on the bottom lines is quite serious,” Uppal said.

“There are still companies which need spectrum. Those who have got it, have at a high price,” he said, adding that it is good for companies that the auction was a non-event.

“It is a good thing...It means companies have to pay less as spectrum fee.”

During the auction the Centre was able to garner only Rs 9,400 crore as against a targeted Rs 40,000 crore. There were no takers for Delhi, Mumbai, Karnataka and Rajasthan blocks. Of the 144 blocks put under hammer, 95 were sold and out of a possible 60 top up blocks only six were sold.

The Centre is eyeing another auction before the end of the current fiscal.

“The government will have to revise the reserve price downwards to make the auction successful,” an official from a telecom firm said.

However, a telecom department official said the Centre could reduce the reserve price of only those blocks for which there was no bidding.