The government will go back to the Supreme Court for further directions on the spectrum issue after March 11, when the Code Division Multiple Access (CDMA) airwaves are auctioned.
After a meeting of the Empowered Group of Ministers (EGoM) on Spectrum, headed by Finance Minister P. Chidambaram, Telecom Minister Kapil Sibal told reporters on Wednesday that no decision on a spectrum auction had been taken at the meeting.
The EGoM was expected to discuss the timeline for a third round of auction as well as inclusion of 900 Mhz band of airwaves. Both Bharti Airtel and Vodafone have opposed the inclusion of the 900 MHz band in the auction.
The third round became necessary after the Supreme Court last month directed the government to auction the entire spectrum that was vacated by 122 2G telecom licences after the court ordered their cancellation on February 2, 2012. Although 514.8 MHz of spectrum was freed as a result of the cancellation of licences, the government put up only 271.25 MHz of spectrum for auction in November 2012.
Following the Supreme Court order, the Department of Telecommunications (DoT) announced that a third round of auction would be held.
Three bands -- 800MHz (used for CDMA services), 900 MHz and 1800 MHz (both used for GSM services) -- were to be auctioned later this month, but there has been lack of interest from telecom firms yet again, indicating that the government will have to cut down prices further to attract interest.
DoT has received an application from just one company - Sistema Shyam Teleservices Ltd - for the 800 MHz CDMA band. Sistema provides services under the brand name MTS. No telecom company has applied for spectrum in the 1800MHz and the 900MHz bands.
After receiving no bids for the GSM auction, DoT had said last month that the matter would be taken up with the EGoM. "The quantum of spectrum, the reserve price and the timelines for this auction will be decided after necessary directions are obtained from the EGoM and where required, the Cabinet, in this regard," DoT had said. It had also brought forward the date for CDMA auction to March 11, while the GSM auction had been postponed.
The second auction had been planned after the first round held on November 12 and November 14 drew muted response from telecom companies, mainly due to high reserve prices, with the government managing to garner bids worth Rs. 9,407 crore, way below its estimates of Rs. 30,000 crore.
GSM spectrum in key circles such as Delhi, Mumbai, Rajasthan and Karnataka had found no bidders, while the CDMA spectrum was not auctioned at all after the two interested parties - Tata Teleservices and Videocon - withdrew from the auction.
Following the poor response, the government had approved a 30 per cent cut in the base price of spectrum in the 1800 MHz band in the Delhi, Mumbai, Rajasthan and Karnataka circles. The government has also removed the cap on bidding for CDMA airwaves, allowing telecom companies to bid for all available slots. Earlier, existing telcos were allowed to bid for just one slot, and new telcos were allowed to bid for only three slots.