India’s govt to begin 2G telecom spectrum auction today
India’s govt will begin tomorrow the auction for telecom spectrum through which it is hoping to meet Rs 40,000 crore revenue target.
The auction for the airwaves or frequencies freed from the cancellation of 122 telecom licenses, belonging to mainly eight companies, by the Supreme Court in February, will start at 0900 hours on Monday. We have taken quick decision, firm decisions in the telecom sector. The result of which is that we are in process of auction. 12th of November that auction will start, India’s Telecom Minister Kapil Sibal said at an event on Monday.
The cancelled permits included Uninor’s 22 licences, Loop Telecom (21), Sistema Shyam (21), Idea Cellular including Spice Communications (13), Videocon (21), Etisalat DB formerly Swan Telecom (15), S-Tel (6) and Tata Teleservices (3 CDMA licences). Instead of auctioning entire spectrum freed from cancellation of licences, the Indian govt is auctioning a maximum of 11 blocks of airwaves frequencies in each circle, barring Delhi and Mumbai where there are only eight blocks, to attract high price for spectrum.
The apex court had allowed the companies, whose permits were cancelled, to get spectrum reallocated for continuing their business if they win rights for the airwaves frequencies in the auction. India’s govt has fixed starting price for spectrum in the auc- tion at Rs 14,000 crore for 5 Mhz of GSM spectrum on pan-India level which is around 7 times more than the price of Rs 1,658 crore at which telecom companies were given pan-India permits between 2001 to 2008. Comptroller and Auditor General has estimated that allotment of permits in 2008 at 2001 prices caused loss to government exchequer to the tune of around Rs 1,76,000 crore.
Citing recommendations of Telecom Regulatory Authority of India (Trai) to fix minimum price of CDMA spectrum at double the price of GSM spectrum, Sibal said that the Empowered Group of Ministers’ realised that there will be no taker for these airwaves at Rs 28,000 and hence it lowered it to 1.3 times instead of double price.