Third round of spectrum auction is not going to happen before this year end. In February, the Department of Telecom (DoT) had decided that a separate auction will be held for the balance of spectrum in 1,800 MHz band in compliance with the direction of the Supreme Court in its order dated 15-2-2013. But the Empowered Group of Ministers (EGoM) on telecom has not come out with any specifics and dates till now due to differences between its members.
According to an official source, there are differences between the members of the EGoM which needs to be thrashed out first and the auction will not happen before year-end. “Some members feel that the price (base price) issue needs to be referred back to Trai (Telecom Regulatory Authority of India) and the others think that is not required since referring it back to Trai will lead to cartelization as has happened in the last two auctions,” the official added.
Planning Commission Deputy Chairman Montek Singh Ahluwalia and Telecom Minister Kapil Sibal think there is a need to refer back the price issue to Trai as the reserve price was very high and led to two unsuccessful auctions. But Defence Minister AK Antony is against it.
Ahluwalia had said “My personal view is that it’s better to get a recommendation from Trai...(because) benchmark is some unrealistic price and it won’t lead to a solution.” The government had fixed reserve price of Rs 14,000 crore for 5 MHz GSM band and RS 18,000 for 5 MHz CDMA band.
A section in the Government thinks that telecom companies cartelized not to participate in big number and managed to coerce the government to reduce both GSM base price by 30 per cent and CDMA by 50 per cent. “But problem is how do you prove there was cartelizationIJ, the official said.
The Government has had two unsuccessful attempts to auction spectrum in the last six months and could collect only around Rs13,000 crore, way below its target of garnering about Rs40,000 crore in the fiscal year 2013. It could earn only Rs9,407 crore in the first round of auction in November against target of Rs28,000 crore from the sale of 2G spectrum in the GSM band. The February auction even beated the first auction and fetched only Rs3,639 crore.
The poor response to the auctions gives relief to the UPA Government to counter the Comptroller and Auditor General of India which had said that in the 2G scam the telecom minister A Raja caused a loss Rs1.76 lakh crore to the exchequer in giving away spectrum on first-come-first-serve basis in 2008 - during UPA regime.