Govt to hold auction for unsold spectrum by March

Thomas K. Thomas New Delhi | Updated on March 12, 2018 Published on November 16, 2012


A file photo of Telecom Minister Kapil Sibal.

The Government will conduct another round of auctions by March to find buyers for unsold spectrum.

The Department of Telecom will seek the telecom regulator’s views on revising the reserve price, which has been criticised by operators as being too high. Only 55 per cent of the spectrum blocks put on sale this week received bids owing to the steep price.

“There will be an auction before March. There is no doubt about that. What procedure we follow for that auction is something we will decide in another few weeks,” Communications and IT Minister Kapil Sibal said.

The auction that started on November 12 got over in just two days with spectrum in key markets, including Delhi and Mumbai, remaining unsold. Of the 176 blocks (each block of 1.25 Mhz) put up for sale, only 101 block received bids.

The Government netted only Rs 9,407 crore, far short of the targeted Rs 40,000 crore.

‘Grieved’ by outcome

Sibal said that he was “grieved” by the outcome of the auction. “We are sad that we would not be able to take the sector forward, because we have been constrained in our policy prescription,” the Minister said, indicating at the criticism of the Government’s spectrum policy by the Comptroller and Auditor General.

The CAG had said that the Government could have got Rs 1.76-lakh crore by auctioning spectrum in 2008. “Where are those Rs 1.76-lakh crore?” Sibal asked, taking a dig at the CAG. Finance Minister P. Chidambaram said that policy making must be left to the government of the day, which can take the economic condition into consideration.

“In the popular imagination this was not the 2G scam, rather the scam involved Rs 1.76-lakh crore. That scam, it is now clear, was pure myth,” Chidambaram said. Asked why a high reserve price was set for the spectrum sale,

Sibal said the reserve price for CDMA was actually brought down from TRAI-recommended Rs 36,000 crore to around Rs 18,000 crore and that for GSM from Rs 18,000 crore to Rs 14,000 crore. “We were criticised for that as to why we are reducing the price,” he said.

Apart from GSM spectrum in four circles, CDMA spectrum across the country remains unsold.

The auction was a far cry from the 35-day bidding for the 3G spectrum in 2010 that got Rs 67,719 crore.

Referring to the plight of telecom companies, Sibal said the “hen that laid golden eggs has been destroyed.”

Cannot ‘extrapolate’

“You cannot extrapolate figures and sensationalise them and destroy the hen that laid the golden egg…Sensationalism took over and the Government was limited in its policy prescriptions which has resulted in what we saw a few days ago,” he said.

“I think this is a lesson that all of us put together should learn and that institutions charged with the responsibility of doing certain things should be allowed to do those things,” Sibal added.


Published on November 16, 2012

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