India's auction of 2G spectrum gets poor response

A high floor price for the auction may have dampened interest, analysts said

The auction of 2G spectrum in India that ended Wednesday will earn the government about one-quarter of what it had planned, reflecting industry concerns about the high cost of the spectrum and the saturation of the country's mobile market.

At the closing of the auction of the 1800MHz spectrum, the Indian government is likely to earn 94 billion rupees (US$1.7 billion) Communications Minister Kapil Sibal told reporters in Delhi. This was far lower than earlier expected revenue of about 400 billion rupees from the auction.

The spectrum was auctioned following a decision in February by India's Supreme Court to cancel 122 2G licenses and auction the spectrum, after it found that there had been irregularities in the allotment of the licenses.

Among the companies that lost licenses as a result were the Indian joint ventures of Etisalat, Sistema and Telenor. Telenor decided to bid in the auction, while Sistema said it would take the legal route to recover the licenses it lost. Etisalat did not participate in the auction.

But response to the auction of the GSM spectrum has been lukewarm with only five companies bidding and no new foreign entrants. The two bidders for CDMA spectrum in 800MHz opted out earlier, and in the auction for the 1800MHz spectrum that started Monday, bidders did not bid for GSM licenses in some key states and cities.

The Indian market is already reaching a plateau and price wars have cut into profits of operators, which may have led to the muted interest in the auction, analysts said.

Five operators including the country's largest, Bharti Airtel, the Indian units of Vodafone and Telenor, and India's Videocon Industries and Idea Cellular participated in the auction.

Telenor said late Wednesday that it had been informed by the government that it secured spectrum in six service areas in India. The company is transferring the business from its earlier joint venture to a new venture with another Indian partner. The company had 22 licenses before they were ordered canceled by the court.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags VodafonetelecommunicationtelephonyBharti AirtelTelenor

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?