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15-Nov2012

2G spectrum auction disappoints; garners mere Rs 9,407 crore

In a bid to prune fiscal deficit, government which was banking on raising over Rs 40,000 crore from the 2G spectrum auction met with disappointment. India's telecommunications-spectrum auction for the 1,800-megahertz frequency band, used for basic mobile-telephone services under the global system for mobile communications technology, received a subdued response from participants, as this garnered mere Rs 9,407 crore.

Apparently, it is also unlikely that the entire amount would be available in the current fiscal as the telecom companies would have the option to stagger payment over three years. In all, only 42% of the blocks could be sold in the auction that lasted two days, with Nov 13 being holiday.

Only 96 bids for 1.25 megahertz each came for 144 blocks, which were with new operators - Telenor, Videocon and Idea. The story was far worse with regard to another 60 blocks with Bharti and Vodafone being the only bidders as the other telecom companies - annoyed over an exorbitantly high reserve price of Rs 13,850 crore for all 22 circles set at the auction-- remained at the bay.

The spectrum sale follows Supreme Court's verdict on February 2 cancelling all the 122 spectrum licenses allotted in 2008 during the tenure of the former telecom minister A Raja. The court urged the government to auction the bandwidth and later allowed the companies affected by the order to continue providing services until January 13, asking the government to complete the auction and allotment of bandwidth before that.


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