Auction will continue: Sibal

Reacting to the poor response from telecom companies to 2G spectrum auction, Telecom Minister Kapil Sibal on Wednesday said that the government will again auction to sell the unsold spectrum.

Speaking to reporters soon after the results of the bidding was announced, the minister said that the government will decide in a few weeks about what procedure to be adopted when it auctioned the 2G spectrum again.

The unsold spectrum, however, firms up government plans for refarming (redistribution) of spectrum at the time licences come up for renewal. The minister also said that auction of allocation of CDMA spectrum will also be held. He hinted that the next auction will be held in the beginning of the next fiscal only.

Since spectrum has remained unsold in Delhi, the government may allocate airwave frequencies to Tata Teleservices at old rates to start its services in this circle, sources said.

Though the Department of Telecom already announced the provisional results, the final result will be declared in a couple of days after taking comments from the inter-ministerial group that was handling the auction process and design.

However, Sibal refused to comment on the Comptroller and Auditor General (CAG) estimation of Rs 1.76 lakh crore as the loss to the exchequer in giving away spectrum on first-come-first-serve basis in 2008.

In an apparent dig at the CAG, he merely said, “the facts are before the nation and quite clear.” The CAG in its report in 2010 said that by not auctioning the 2 G spectrum in 2008, the presumptive loss caused to the government exchequer was Rs 1.76 lakh crore. The then Telecom Minister A Raja distributed the spectrum on first-come-first-served basis in 2008 at 2001 prices. After the Supreme Court cancelled 122 licences issued by Raja, the Telecom Regulatory Authority of India (TRAI) had fixed the base price at Rs 18,000 crore for auctioning the pan-India licences. But the government had decided to fix the base price at Rs 14,000 crore. The tepid demand for 2G airwaves was attributed to high base price. The Telecom Minister indicated that high base price was fixed due to order of apex court in 2G scam case.

“The judgment of the court said procedure of the 3G auction is to be followed and we went to Trai. The Trai made those recommendations and Trai fixed it (pan-Indian spectrum base price) base at Rs 18,000 crore (for GSM) and for CDMA Rs 36,000 crore,” Sibal said.

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