Plan to hold auction for unbid circles by March 31: Sibal

Telecom minister Kapil Sibal today said that the issue of circles that were not bid for in the 2G auction held earlier this week will be taken up with an empowered group of ministers soon.

“Our intent is to have another auction before March 31,” Mr. Sibal said.

Mr. Sibal was addressing a press conference in New Delhi along with Finance Minister P. Chidambaram, where they spoke about the recent auction.

Four GSM circles—Delhi, Mumbai, Karnataka and Rajasthan—were not bid for in the auction that lasted just two days and fetched the government Rs 9,407 crore, way below the Rs 40,000 crore expectations. Analysts say the government may have to rework prices to make the circles more attractive.

High base prices and a general slowdown in the economy were the main reason for the poor interest of telcos in the auction.

Five telcos participated in the auction of GSM spectrum, but none applied for an all-India licence, saying the government's base price of Rs 14,000 crore for 5 MHz of GSM airwaves in all the 22 telecom zones was too high. This is more than seven times what companies paid in the 2008 grant process.

The government had planned to hold auction for both GSM and CDMA spectrum, but the CDMA auction was not held after the two companies that had initially expressed interest—Tata Teleservices and Videocon—withdrew from the auction.

Of the five telcos that bid for GSM airwaves, Videocon won four blocks each in six circles and Idea won four blocks each in the seven circles, while Telenor got spectrum in six. Vodafone secured spectrum in as many as 14 circles, which included Uttar Pradesh (East) and Uttar Pradesh (West). Bharti Airtel Ltd won spectrum in only one circle—Assam.

All 22 telecom circles in the country were put on the block in the auction that began on Monday. Nearly half of the blocks remained unsold at the end of the auction.