Sistema buys CDMA spectrum in 8 circles for Rs 3,639 crore

The second round of 2G Spectrum auction for Code Division Multiple Access (CDMA) services ended here on Monday with Russian conglomerate Sistema’s Indian unit the SSTL winning radio waves in eight circles for Rs 3,639 crore in an auction.

As all other companies had shunned it, the auction ended in just three rounds with lone bidder SSTL putting its bids at the minimum bid price, Telecom Secretary R Chandrashekhar told reporters after the bidding.

In all, 24 blocks in eight telecom circles were allocated out of 61 blocks that were put for auction. The government has put the CDMA spectrum worth Rs 6,400 for auction and it could garner only Rs 3,639 crore, a little over 56 per cent of the total value.

The government may not get any advance payment as Rs 1,626 crore has to be adjusted against the license fee the SSTL had paid in 2008. Earlier, the Apex Court had cancelled 122 licences which also included 21 of SSTL.

Terming the base price too high, none of the 12 telecom operators in the world’s second-largest mobile phone market, including Anil Ambani’s Reliance Communications and Tata Teleservices, participated in the auction.

The SSTL, which operates on the CDMA platform, said it won spectrum in 800 MHz band in Delhi, Kolkata, Gujarat, kKarnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) and West Bengal.

This means, it will have to close operations in Mumbai, Maharashtra and UP East, where the company has over 15 lakh subscribers.

“Given the range of variables we have considered and the spectrum cost for 800 MHz, it was a big challenge to arrive at a core list of eight circles and to bid accordingly,” SSTL President and CEO Vsevolod Rozanov said in a statement.

The auction results are likely to dampen Finance Minister P Chidambaram’s efforts to garner Rs 19,400 crore from spectrum sale this fiscal.

The auction for 2G spectrum for GSM players held in November last year was spread across three days fetching the government Rs 9,407 crore. 

The CDMA sale did not take place in November last year as there was no participation due to high cost.

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