Shocked by the poor response to the 2G mobile phone spectrum auction last month, a high-level ministerial panel has decided to slash the base price by 30 per cent in the 1,800 MHz band in four telecom circles, including Delhi and Mumbai, which had failed to attract buyers.
Rajasthan and Karnataka were the other two circles that did not receive bids. The empowered group of ministers (EGoM) will now forward the proposal to the Cabinet for approval to pave the way the second phase of the auction for the four circles in the current fiscal ending on March 31, telecom minister Kapil Sibal told reporters here after the EGoM meeting on Friday.
"The EGoM has decided to auction the 1,800 MHz band in four circles-Delhi, Mumbai, Karnataka and Rajasthan-and 900 MHz band in Mumbai, Kolkata and Delhi," Sibal said. "… we will now be moving the Cabinet for approval. We will complete the auction process within this financial year." Sibal added that no decision has been taken on auction of airwaves in the 800 MHz band (CDMA spectrum).
The much-hyped auction turned out to be a flop as the government managed to garner bids worth just Rs 9,407 crore, which was way below the minimum target of Rs 28,000 crore.
The reserve base price for Delhi was Rs 693.06 crore, Mumbai Rs 678.45 crore, Karnataka Rs 330.12 crore and Rajasthan at Rs 87 crore. These four circles account for, at least, half the base price for pan-India licences, which was fixed at Rs 13,850 crore. Eight blocks of spectrum having 1.25 MHz airwaves frequencies in each circle were auctioned.
Of the 22 circles, in which the country has been divided, bids were received for 18 circles. Only in the case of Bihar, the bid was marginally above the reserve price. No operator applied for an all-India licence citing the high reserve price, which was almost eight times more than what companies paid in 2008, when thentelecom minister A. Raja gave them start-up spectrum of 4.4 MHz for a pan-India licence fee of Rs 1,651 crore.
The high expectations were based on the 3G auction held in 2010, which had raked in over Rs 67,719 crore. Compared to the 3G auction, which lasted 35 days, the November auction lasted for only two days. The auction was held after the Supreme Court in February cancelled 122 licences held by eight telecom operators. New players and companies affected by the verdict had to win, at least, four blocks to start or continue their operations.
Bharti Airtel, Vodafone India, Idea Cellular, Norway's Telenor and Videocon bid for GSM airwaves, but there were no bidders for the CDMA spectrum after Tata Teleservices and Videocon pulled out of the race.
Rajasthan and Karnataka were the other two circles that did not receive bids. The empowered group of ministers (EGoM) will now forward the proposal to the Cabinet for approval to pave the way the second phase of the auction for the four circles in the current fiscal ending on March 31, telecom minister Kapil Sibal told reporters here after the EGoM meeting on Friday.
"The EGoM has decided to auction the 1,800 MHz band in four circles-Delhi, Mumbai, Karnataka and Rajasthan-and 900 MHz band in Mumbai, Kolkata and Delhi," Sibal said. "… we will now be moving the Cabinet for approval. We will complete the auction process within this financial year." Sibal added that no decision has been taken on auction of airwaves in the 800 MHz band (CDMA spectrum).
The much-hyped auction turned out to be a flop as the government managed to garner bids worth just Rs 9,407 crore, which was way below the minimum target of Rs 28,000 crore.
The reserve base price for Delhi was Rs 693.06 crore, Mumbai Rs 678.45 crore, Karnataka Rs 330.12 crore and Rajasthan at Rs 87 crore. These four circles account for, at least, half the base price for pan-India licences, which was fixed at Rs 13,850 crore. Eight blocks of spectrum having 1.25 MHz airwaves frequencies in each circle were auctioned.
Of the 22 circles, in which the country has been divided, bids were received for 18 circles. Only in the case of Bihar, the bid was marginally above the reserve price. No operator applied for an all-India licence citing the high reserve price, which was almost eight times more than what companies paid in 2008, when thentelecom minister A. Raja gave them start-up spectrum of 4.4 MHz for a pan-India licence fee of Rs 1,651 crore.
The high expectations were based on the 3G auction held in 2010, which had raked in over Rs 67,719 crore. Compared to the 3G auction, which lasted 35 days, the November auction lasted for only two days. The auction was held after the Supreme Court in February cancelled 122 licences held by eight telecom operators. New players and companies affected by the verdict had to win, at least, four blocks to start or continue their operations.
Bharti Airtel, Vodafone India, Idea Cellular, Norway's Telenor and Videocon bid for GSM airwaves, but there were no bidders for the CDMA spectrum after Tata Teleservices and Videocon pulled out of the race.