Top 10 facts of 2G spectrum auction

The top ten facts of 2G spectrum re-auctioning process in 1800 MHz frequency band:

#1: 2G spectrum re-auction turned out to be a disaster due to the high reserve price (Rs 14,000 crore) and for limiting spectrum availability. Government has held 413 MHz and it had only put up 35 per cent of the total spectrum.

#2: Government cashed in just Rs 9,407.64 crore instead of Rs 28,000 crore revenue target from the sale of 2G spectrum in GSM band. Overall, the government had budgeted Rs. 40,000 crore as revenue from spectrum sale this fiscal.

#3: In the two-day re-auction process on November 12th and 14th, only one-third of the spectrum blocks attracted bids.

#4: Out of the five bidders - Airtel, Vodafone, Videocon, Idea and Telewings. Vodafone bagged licenses in 14 circles including Jammu and Kashmir, Assam, Himachal Pradesh, Uttar Pradesh (East), Uttar Pradesh (West), Madhya Pradesh, Gujarat, Haryana, Bihar, Kerala, Orissa, North East, Punjab and Kerala. Videocon and Idea (Assam, Kolkata, the north-east, West Bengal, J&K, Odisha, Tamil Nadu) won spectrum in seven circles, Telewings received license in six circles namely Gujarat, Bihar, Maharashtra, UP (east and west), Andhra Pradesh circles and surprisingly Airtel was successful in only Assam circle.

#5: There were no bidders for the four major telecom circles namely Delhi, Mumbai, Karnataka and Rajasthan. Out of the total 144 blocks, 101 blocks received bids.

#6: The five winners of 2G auction have to pay 33% of the bid amount upfront. And the rest is to be paid in ten equal instalments from 2015 to 2024.

#7: No operator applied for pan-India 2G airwaves in 1800 MHz frequency band.

#8: The net gain to the exchequer is gloomy. As per the media reports, since only 33% of the bid amount has to be paid upfront, only Rs. 3,190 crore would be due in the current fiscal. However Idea, Videocon and Telenor's cancelled license fee was adjusted against the earnest money deposited for the auction. Idea’s Rs.1,000 crore, and Videocon and Telenor (earlier Uninor) Rs. 1,658 crore each which totals to Rs. 4,300 crore. Therefore, it is unlikely that any payment would be made to the exchequer in FY 2013, unless some companies pay upfront to save upon the 9% interest.

#9: Government plans to re-auction unsold spectrum, after the allocation of spectrum, before the end of FY 2013.

#10: As Tata Teleservices and Videocon withdrew from CDMA auction last week, there are no bidders and CDMA has become a damp squib.