Government's 2G spectrum auction next month looks set to flop with just one company, Russia's Sistema, making application for participation in sale of airwaves, that too in just one of the three bands for which bids were invited.
The Department of Telecommunications (DoT) had announced conducting auction for spectrum unsold in November along with spectrum that is being held by operators whose licences are due for renewal in 2014.
Even after government slashed the base price by 50 per cent for CDMA spectrum (800 Mhz band), no telecom company applied, except Sistema's Indian joint venture Sistema Shyam Teleservices which expressed interest for CDMA spectrum in select circles.
The price of spectrum (1800 Mhz band) in Delhi, Mumbai, Karnataka and Rajasthan was reduced by 30 per cent after no bid was received for them in November. But even after a price cut, there was no taker.
"No application was received for the second round of 2G GSM spectrum till the official declared time of 5:00 pm today, while SSTL was the lone applicant in the CDMA spectrum auction," a DOT source said.
Reacting to the muted interest shown by companies, Telecom Minister Kapil Sibal told PTI: "Fate of this sector is being decided somewhere else. Government has done its best and meticulously followed the Supreme Court order."
" I think that government hands were tied....And the result is for everybody to see." he added.
While cancelling 122 2G telecom licences, the Supreme Court on February 2, 2012 asked government to allocate spectrum to companies through auction.
The Comptroller Auditor General had estimated that spectrum allocated to telecom companies in 2008 could have fetched the national exchequer a revenue of around Rs 1.76 lakh crore.
The spectrum auction next month could fetch government around Rs 43,000 crore if all airwaves were sold at base price. The demand for pan-India CDMA airwaves could fetch government revenue of around Rs 6,000 crore.
