In a major setback for the government, which is expecting some bing-bang show in the 2G-Spectrum auction days but all its expectations went in vain as after concluding the bids, telecom department reportedly got the bids of just Rs.9,407-crore as against comptroller and auditor general of India's (CAG's) estimation of over Rs.34,000-crore.
After cancellation of 122 licences of 2G-spectrum by Supreme court, it telecom department had to go for fresh auction for the remaining period and remaining circles.
The auction begins on Tuesday for all 22 circles and concluded on Wednesday with very few bidding that could reached to only Rs.9,407-crore, informed Union Telecom Minister Kapil Sibal on Wednesday to the reporters.
Sibal refused to comment on the CAG's estimation of Rs. 1.76 lakh crore as the loss to the exchequer in giving away spectrum on first-come-first-serve basis in 2008.
In an apparent dig at the CAG, he merely said, "the facts are before the nation and quite clear."
Going by the 3G auction price, the current sale should have fetched Rs. 1 lakh crore but "what we have got is Rs. 9,407 crore.…….so this is a market and that is how it plays itself out."
None of the five companies bidding for the spectrum made any offer for pan-India airwaves for which the reserve price was set at Rs. 14,000 crore, a rate considered high by the industry.
Sibal said in all 101 out of the 144 blocks of spectrum on offer got bids.
Metro cities of Delhi and Mumbai, which accounted for 40 percent of the base price of Rs. 14,000 crore for 5MHz of 2G spectrum, drew no bids.
"We should have got one lakh crore, but got less than Rs 10,000 crore. We have done exactly what the court has asked us to do. We even reduced the reserve price set by Trai to Rs 14,000 (for 5 MHz on a national basis)," Sibal said.
In all circles, bids were at the base price with the exception of Bihar, where they ended marginally higher, according to data released by the telecom department on its website.
Mobile phone companies and analysts termed the auction, which lasted just two days, a failure and demanded that the government reexamine its policies, including the reserve price, but telecom minister Kapil Sibal said the Centre 'can't be faulted as the base price had been fixed by Trai".
"It is very dangerous to extrapolate 2010 prices to 2012. The nature of market in 2008 was different from that of 2010. The state of the market in 2008 and 2010 is different from that in 2012," he added.
Vodafone, the star bidder in the round of auction said the fall in the market was the reason of diluting the price. The condition of current market is different from the condition of 2008 and 2010, when Indian economy was booming while at present, it is not performing well.
--With Agencies Inputs--
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