2G auction get lukewarm response
Telenor and Bharti Airtel have bid cautiously and there has been excess demand only in two out of 22 circles.
New Delhi: There has been a lukewarm response to 2G spectrum auction which opened on Monday in New Delhi with sources saying that there have been no bids in the top five to six circles. The first two rounds of re-auction of 2G spectrum have ended and no company has come forward to bid for key and lucrative circles like Delhi and Mumbai. There have been no bids for Rajasthan and Kolkata circles too.
Telenor and Bharti Airtel have bid cautiously and there has been excess demand only in two out of 22 circles, sources add. The third round has also come to an end with bidders dropping out of the race for Uttar Pradesh (East). If the response is not encouraging then the government's hopes of raking in Rs 40, 000 crore may fall flat. There have been no applications for pan-India spectrum, the base price for which was set at Rs 14,000 crore that the industry said was too high.
India is divided into 22 telecom circles and companies can bid for circles that remain unsold in the initial rounds. Sources said the auctions has drawn scant interest so far as the base price is much higher than what the companies paid in 2008. The base price of Rs 14,000 crore for 5 MHz of GSM radiowaves or spectrum in all the 22 zones is more than seven times what the companies paid in 2008.
Sunil Bharti Mittal, Chairman of Bharti Airtel, the nation's largest telecom company, had predicted that the auction would be over on first day itself because of the high base price. Bharti Airtel, Vodafone, Idea Cellular, 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.
The auction will continue till 1930 hours. The auction comes after the Supreme Court had cancelled 122 licences in February 2012. The government has time till the January 11, 2013 to complete the auction.
(With additional information from PTI)