2G auction ends in two days, half of blocks unsold
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The government now plans to auction the rest of the spectrum within the current fiscal that ends in March 2013. "We will have to again try to sell the spectrum that could not find takers in this auction and that we will try to do before the start of the next financial year. We can only auction the spectrum that is left after this auction," said Sibal.
There are also reports that the department of telecommunications could approach the Telecom Regulatory Authority of India to consider fresh pricing of spectrum. This, however, could create another round of controversy. Telecom companies which have won spectrum in the current auction would then be left holding costly airwaves while others could get it at a cheaper price.
Officials said actual government revenues from the latest auctions could be even less as the companies have the option of making staggered payments wherein only 33 per cent needs to be paid upfront.
Only five operators — Bharti Airtel, Vodafone, Telewings, Videocon, and Idea Cellular - participated in the auctions. Videocon and Idea won spectrum in seven circles while Telewings got spectrum in six circles. Bharti Airtel won in one circle while Vodafone got 14 circles.
The auction process dragged on due to some excess demand in circles such as Uttar Pradesh (east) and (west) and Bihar, all 'C' circle circles where the reserve price was low. Of the total 22 circles, bids were received in only 18 circles, with four key circles with high reserve price - Karnataka, Delhi, Mumbai and Rajasthan - not drawing any bids. Barring Bihar, bidders got spectrum in all circles at the reserve price.
On Wednesday, the Cellular Operators Association of India said the problem was in the execution of auctions rather than auctions as a process to sell spectrum. The Association of Unified Service Providers of India said if most circles had been won on reserve price, there was no market discovery and that it could be better called administrative pricing.