The pre-Diwali 2G auctions were meant to create a level playing field in the sector that was once the poster boy of liberalisation. Major players such as Bharti, Videocon and Idea bid conservatively, which meant that high value circles such as Delhi and Mumbai received no bids and prices for the rest of the 22 telecom circles too were muted.
For consumers, the bidding pattern implies current telecom tariffs will hold but the government’s plan to earn additional revenue by charging an additional price for the 900 Mhz band is now up for re-pricing. It was earlier expected that the price of refarming will be decided by the price realised in this auction for the 1800 Mhz band.
The auction had become necessary after the Supreme Court’s February ruling cancelling 122 telecom licences issued in 2008 by then telecom minister A Raja. The court had asked the government to auction the licences instead.
The court verdict followed a CAG audit that had put a maximum notional loss to the exchequer from the ministerial allocations at Rs 1,76,000 crore. It resulted in a spate of prosecutions by the government that also created a political storm. Monday’s auctions were seen as a demonstration of the impact of a transparent method of allotting resources and are supposed to be a template for the auction of other natural resources such as coal and other mining products.
The results from the auction after the seven rounds of bidding on the first day showed there was sustained interest only for circles such as UP (West), UP (East), Bihar and Gujarat. High value circles such as Delhi, Mumbai, Karnataka and Rajasthan did not get any bids. But the auctions themselves were a world apart from the arbitrary ministerial discretion-based allotment of resources that has been the norm.
For UP (West) and UP (East), there were bids for 10 and nine blocks respectively. Bihar and Gujarat received eight bids each, Assam got bids for seven blocks. A block includes 5 Mhz of spectrum.
“Around 55 to 60 per cent of the total blocks on auction have so far been taken up and total quantum of revenue received till the end of the fifth round is a little over Rs 9,200 crore,” telecom secretary R Chandrashekhar said.
Around 33 per cent of the total receivables from the auction will come to the government in the first year and the rest will come in 10 equal installments.
The impact of low interest in the auctions will be felt gradually, as the charges for keeping the 900 Mhz spectrum and one-time spectrum fee to be charged for licence renewal from existing operators will be decided on the basis of the price that emerges out of this auction.
Even after putting the limited spectrum for auction (instead of the entire 122 cancelled licenses'spectrum)the response is tepid. Assuming that the Government puts the entire specturm available for auction due to the cancellation of 122 licenses there will be plenty and the price will be further depressed. So it is no where near the figure CAG had put as the notional loss. May be something is missing or not understood correctly. Will someone throw light on this?. So much of muck racking has been indulged by one and all, including press. May be the Press and other worthies including Opposition could throw some light why the auction price is not realised. For common man there has been a perception that the Government has deliberately given away the spectrum at a throw-away price to cronies. It is important the correct picture is put before the public.
We are adopted to resort or engage in Corruption out of habit and hence any hard work involved to deliver a Task to the Country for the benefit of the Common General Public is bearing no value to us under the present environment which is stopping us in taking part in such noble activities in large numbers.This is what we are ! We are bringing-up the talented ones by offering them High Positions in the Government to kill Institutions like CAG etc. for their straight forward offering of suggestions to us to retrieve the Country to a recoverable level.Any New such Institution set up for such or similar purposes shall meet with a similar fate unless we bow to the desire of the Corrupts.Therefore, we must reform ourselves individually and refrain from killing the innocents who are delivering to the Country.The revelations are important to know ourselves about our hidden identities as a Country.Why are had stopped to offer LOVE & RESPECT to the Country just to derive pleasures to us.
Now, what does the CAG and the apex court have to say?
This is a clear case of cartelisation.This proves all the more the need of performance audit of operational functions of the companies.