Reliance Communications Pulls Out Bids

The bidding process for the fourth cellular operator further diluted today with Reliance, which had applied for 15 identical circles under two different companies, pulling out the bids submitted by Reliance Communications while retaining those put in by Reliable Internet Services.

This brings the total number of bids received by the government down from 57 to 42 even before the actual bidding has begun.

This will also mean that the first round of bidding has been reduced to a mere formality as bidders for 15 of the 17 circles for which bids were received will directly go to the second round as it is left with a total of four or less than four bidders.

According to DoT sources, bidders for circles having four or less than four candidates will directly go through to the second round with the first round being used to set the floor price of the second round.

Even as all of the 15 circles will have one bid fewer, Karnataka, the only circle to have initially received 5 bids, will also now have just two rounds of competitive bidding.

It also levels out the playing field between the bidders as Reliance, now with just one bid per circle, is at par with other bidders. The Reliance move comes after DoT yesterday sent a letter to all the seven bidders stating that two companies which are fully or partly owned by the same promoter cannot bid for the fourth cellular licence in the same circle.

While Reliance Communication is a 100 per cent subsidiary of Reliance Industries, a substantial stake in Reliable Internet Services is held by the Reliance Group which includes a 30 per cent stake held by Reliance Telecom, 10 per cent by Reliance Capital and 60 per cent by various companies like Reliance Link and Colonial Capital and Avanti Mercantile.

Since the group, now with only one company as a bidder, did not want to take any chance of being disqualified, it has opted for Reliable Internet, in which Reliance