Sistema wins spectrum in 8 circles for Rs 3,639 crore

Business
Sistema Shyam TeleServices Ltd (SSTL), the Indian mobile phone arm of Russian telecom firm Sistema, won airwaves in eight circles with its sole bid of Rs 3,639 crore. After a dismal show in selling 2G airwaves in November last year, the government's attempt to sell the airwaves again saw SSTL participate as the sole bidder, putting in the minimum bid price.

A no-show by telecom players for the second time round has impacted the government's plan to earn an estimated Rs 19,400 crore from auctions during this fiscal. The finance ministry had previously targeted Rs 40,000 crore from spectrum auction to cut budget deficit but had to bring it downwards.

This round of auctions effectively fetched the government Rs 3,639 crore, much lower than the Rs 9,407 crore it earned in the auctions held in November last year.

Compared to one bidder in the 800 Mhz CDMA spectrum and none in 1800 Mhz GSM spectrum band this time round, auctions in November had seen five bidders participate in the 1800 Mhz GSM spectrum but none for the 800 MHz CDMA spectrum.

SSTL, in a statement issued later in the day on Monday, said that it won 800 MHz band spectrum in eight circles Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) and West Bengal.

The company said it would be required to pay Rs 3,639 crore for the licence period and the terms include payment of 25 per cent of the final bid amount within 10 days, followed by a payment moratorium until March 2016.

Of the total money, the company will adjust Rs 1,626 crore, which it had paid as licence fee in 2008. The balance Rs 2,013 crore will be paid in 10 annual installments starting March 2016. SSTL had to bid after the Supreme Court cancelled 21 out of 22 licences of the company awarded in 2008.

By bidding for eight circles, Sistema will have to close operations in Mumbai, Maharashtra and UP East, where the company has over 1.5 million subscribers.

This will be over and above the earlier announcement of discontinuation of services in 10 out of 22 telecom circles Assam, Andhra Pradesh, Bihar, Himachal Pradesh, Haryana, Jammu and Kashmir, Madhya Pradesh, North East, Orissa and Punjab.

SSTL lone bidder

* A no-show by telecom players for the second time round has impacted the government's plan to earn Rs 19,400 crore from auctions during this fiscal

* This round of auctions fetched the government Rs 3,639 crore, much lower than the Rs 9,407 crore it earned in the November auctions

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