2G spectrum auction flops

2G spectrum

The government had put on auction more than half of the spectrum that was freed from Supreme Court in February this year cancelling 122 mobile permits issued by the then Telecom Minister A Raja to nine telecom companies in 2008.

The Comptroller and Auditor General of India (CAG) had in 2010 said Raja's decision to give away spectrum at rates fixed in 2001 had caused a presumptive loss of Rs 1.76 lakh crore to the exchequer taking the price garnered in the 3G auction as the benchmark.

The government thereafter fixed a base at a rate almost equivalent to the third-generation (3G) auction price.

Further, as the government has promised to refund the license free paid in 2008, the net gain to the exchequer may be almost nil.

Dismissing allegations that companies colluded with the government, Sibal said "We have done exactly what the courts asked us to do. Infact the court asked us to sell (spectrum at a minimum price of) Rs 18,000 crore, we brought the price down because we wanted to sell, we wanted companies to buy."

"If we had fixed it at Rs 18,000 crore in terms of what Trai had recommended, this (even Rs 9,407 crore ) would not have been fetched," he added.

Lamenting the mess in the sector, Sibal said, "the consumer has not benefited at all because the nature and the kind of investments that ought to have gone into the sector have stopped and the sector has been in debt."

As per the provisional result, Vodafone emerged as the biggest winner getting additional spectrum in 14 circles of Jammu and Kashmir, Assam, Himachal Pradesh, Uttar Pradesh (East), Uttar Pradesh (West), Madhya Pradesh, Gujarat, Haryana, Bihar, Kerala, Orissa, North East, Punjab and Kerala.

Its market competitor Bharti Airtel managed only in Assam circles.

... contd.

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