Press Esc to close
Thursday 02 October 2014
News updated at 5:54 PM IST
Weather
Max: 29.9°C
Min : 20.7°C
In Bangalore
Sunny day

2G auction flops; govt collects Rs 9,407 cr only

New Delhi, Nov 14, 2012 (PTI)

Low mop up spoils plan to check deficit

File photo - PTI

The much-hyped 2G mobile phone spectrum auction ended here on Wednesday with the government garnering only Rs 9,407 crore against the expectation of a minimum Rs 40,000 crore.

The auction, termed a big flop, is contrary to the high valuation estimated by the Comptroller and Auditor General (CAG) in its report two years ago. Announcing the results, Telecom Minister Kapil Sibal said in the auction that lasted just two days, the amount raised was Rs 9,407.64 crore. This amount is much lower than the 3G spectrum bidding that took place in 2010 in which the government received Rs 67,719 crore.

Industry termed that high reserve price was the reason behind the poor response from telecom companies. However, Sibal dismissed the allegations that a cartel by the telecom companies ensured that the auction flopped. 


Lukewarm response from the telecom companies also upset the government plan to earn Rs 40,000 crore from this fiscal from sale of radio waves to meet the revised fiscal deficit target of 5.3 per cent of GDP. The government expected that out of the Rs 40,000 crore, it could earn Rs 28,000 crore from GSM spectrum and the rest from the CDMA. However, this time there was no bidding for CDMA as both Videocon and Tata Teleservices backed off. The minister said only 101 out of 144 blocks of spectrum on offer received bids.

Metros Delhi and Mumbai, which accounted for 40 per cent of the base price of Rs 14,000 crore for 5 MHz of 2G spectrum, attracted no bids. Similarly, Karnataka, Mumbai and Rajasthan also did not receive any bids.

Interestingly, none of the five companies bidding for the spectrum made any offer for pan-India airwaves for which the reserve price was set at Rs 14,000 crore, a rate considered high by the industry.

According to the provisional result, Vodafone emerged the biggest winner, getting additional spectrum in 14 circles of Jammu and Kashmir, Assam, Himachal Pradesh, Uttar Pradesh (East), Uttar Pradesh (West), Madhya Pradesh, Gujarat, Haryana, Bihar, Kerala, Odisha, North East and Punjab. Its market competitor Bharti Airtel managed only in Assam circles.

Dismissing allegations that companies colluded with the government, Sibal said: “We have followed the court direction. Though the court asked us to sell (spectrum at a minimum price of) Rs 18,000 crore, we brought the price down because we wanted to sell, we wanted companies to buy.

“If we had fixed it at Rs 18,000 crore in terms of what the Trai had recommended, this (even Rs 9,407 crore) would not have been fetched,” he added. The government had put on auction around 60 per cent of the spectrum that was freed by the Supreme Court in February this year .

Go to Top

Photo Gallery
Nokia India Sales Marketing Director Raghuvesh Swarup launches the new Nokia Lumia ...

Nokia India Sales Marketing Director Raghuvesh Swarup launches the new Nokia Lumia ...

India's Mary Kom is lifted by her coach after she won the gold in women's flyweight boxing ...

India's Mary Kom is lifted by her coach after she won the gold in women's flyweight boxing ...

Bollywood actress Sushmita Sen attends the Durga Puja celebrations in Mumbai ...

Bollywood actress Sushmita Sen attends the Durga Puja celebrations in Mumbai ...

A huge statue of Mahatma Gandhi in Bengaluru a day before its inauguration ...

A huge statue of Mahatma Gandhi in Bengaluru a day before its inauguration ...

Silver medal winner India's Tintu Luka poses at the podium during the medal ceremony ...

Silver medal winner India's Tintu Luka poses at the podium during the medal ceremony ...

Boxer Mary Kom kisses shares a moment with her kid after winning the gold medal ...

Boxer Mary Kom kisses shares a moment with her kid after winning the gold medal ...

Damaged coaches after Krishak Express and Barauni Express collided near Gorakhpur ...

Damaged coaches after Krishak Express and Barauni Express collided near Gorakhpur ...

India's boxer Sarita cries at the podium after refusing to accept the bronze medal ...

India's boxer Sarita cries at the podium after refusing to accept the bronze medal ...

People look at the damaged coaches after Krishak Express and Barauni Express collided ...

People look at the damaged coaches after Krishak Express and Barauni Express collided ...

Indian tennis legend and global ambassador of the sport, Vijay Amritraj addressing during ...

Indian tennis legend and global ambassador of the sport, Vijay Amritraj addressing during ...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bangalore - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523