Govt flunks 2G test again - Daily News & Analysis

The government had expected to mop up at least Rs39,000 crore from the second round of spectrum auctions for the 1,800 MHz and 900 MHz (2G) bands scheduled for March. But on Monday, the last date for submitting applications, none of the mobile phone service operators applied to bid at the planned auctions. "As we have received no applications, there will be no auction in these two bands," said R Chandrasekhar, secretary of the Department of Telecommunications (DoT). Rajan Mathews, director-general of the Cellular Operators' Association of India, said, "No operator had expressed an interest in auctions this time. The reserve price was still very high." He said the reserve price should be further lowered to interest operators. "The industry is spectrum-starved but at this price, there seems to be no business case for the players." In the 800 MHz band, Sistema Shyam Teleservices (SSTL), which stands to lose all its 22 licences following the Supreme Court's orders last year, is the only player that applied to bid (for only selected circles, that is) at the auction. "Post-auctions, with the operational footprint clearly defined, the plan is to focus on SSTL's data-centric, voice-enabled strategy in select circles and build an even stronger brand in India," the company said in a statement. With no other competitors, Sistema is likely to bag the spectrum at the base price. In January, the Cabinet had approved the recommendation of the empowered group of ministers to reduce the reserve price of CDMA (code division multiple access) spectrum, to be auctioned in March, by 50%, following the no-show of bidders at the previous auction. At Rs3,640 crore per MHz for all 22 telecom circles, the earlier reserve price for the CDMA spectrum was 30% more than that for the GSM (global system for mobile communication) spectrum and over 10 times what operators had paid in 2008. The government had reduced the reserve price for four key circles (which did not receive bids last month) by 30% for the next auction in the 1,800 MHz band. Yet, there were no bidders. Firms such as Bharti Airtel, Vodafone and Idea Cellular were expected to participate in the 900 MHz spectrum auction after the government had said the former will have to win it backthrough auctions. The players heaved a sigh of relief after the Delhi High Court last week asked the DoT to look into their applications for extension of licences. The court, however, declined to stay the auction of the 900 MHz spectrum for the Delhi, Mumbai and Kolkata circles. Vodafone had moved the Delhi High Court against the government's plan to auction its 900 MHz spectrum even while its application for extension of licences was pending with the DoT. The DoT has to respond by March 7 on this issue. Even the much-hyped first round of 2G auctions in November received a muted response. They lasted all of two days, and received bids worth Rs9,047 crore against the target of a minimum Rs28,000 crore. @priyankasahay via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNF2brh0V-wCv2Fhpmt6wgL5aCA3SA&url=http://www.dnaindia.com/money/report_govt-flunks-2g-test-again_1804516

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