Spectrum auction: Govt fails once again

Its deja vu for India's spectrum auction to be held on March 11 as System Shyam became the sole bidder for CDMA airwaves with no takers for GSM frequency. Monday was the last day for filing application to participate in the upcoming 2G spectrum auction, and with just one bidder -SSTL- the auction is all but over even before it starts.

Three months back, in November auction, the exercise was failed and the government could garner only Rs 9000 crore against the expectation of Rs 40,000 crore, as the bidding process got over in just two days with many lucrative circles remained un-auctioned. High reserve price was attributed to the failure for the November auction but despite slashing the base price by one third, the upcoming spectrum auction also did not excite many bidders.

Analysts say the base price is still too high and there are many loopholes and uncertainties in the current policy which discourages the operators to participate in the bidding.

The government will begin the auction process on March 11 in 1,800 Mhz band for three circles - Delhi, Mumbai and Karnataka- that remained un-auctioned in November. This will be followed by auction of 800 Mhz spectrum band where Sistema Shyam is the sole bidder. The company has lost its license to operate in the country post the apex court's cancellation of 122 licenses in February last year. Finally, the auction for 900 Mhz spectrum will take place where the reserve price has been fixed at a double price that of 1,800 Mhz.

Many incumbent operators stayed out of this auction as the government has linked the outcome of the auction to license renewal and airwaves refarming fee. The licenses of large operators like Vodafone and Bharti airtel are set for renewal in 2014.