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Muted response to 2G spectrum auction

Posted on Nov 12, 07:22PM | IANS

Auction for the second generation (2G) mobile spectrum started Monday with no takers for the airwaves in the national capital region, Mumbai and Karnataka.

The tepid response indicated that the government would fall substantially short of the revenue that it planned to raise from the spectrum sale.

At the end of the fifth round of the auction, bids for less than Rs.10,000 crore were received. Bid price for only two circles UP East and UP West exceeded the reserve price of Rs.14,000 crore set for 5 megahertz of airwave space in all 22 circles.

Bids for 98 blocks in 18 circles were received at the end of the fifth round of the auction. Airwaves of 176 blocks in 22 circles are up for sale in the auction.

There have been no bidders for the national capital region, Delhi, Mumbai, Rajasthan and Karnataka circles.

Also, no telecom operator has applied for a pan-India licence.

Five telecom operators - Bharti Airtel, Vodafone, Idea Cellular, Videocon and Telenor-promoted Telewings - are participating in the 2G spectrum auction.

The base price set for the auction is seven times more than what the telecom firms paid for the airwaves in 2008.

The muted response to the 2G auction is in sharp contract to the buoyant response to the third-generation spectrum sale in 2010. The government had raised over USD 12 billion in the auction of 3G spectrum that had lasted for more than a month.