2G auction ends, Sistema Shyam submits bids for 8 circles.

The auction of second-generation CDMA spectrum has ended after three rounds, with lone bidder Sistema Shyam TeleServices Ltd (SSTL) bidding for eight circles, Department of Communication sources told NDTV Profit. The company has submitted bids worth Rs.3,639 crore for these circles.
  1. While the firm, which offers services under the MTS brand, has bid for the Delhi circle, it skipped the Mumbai, Maharashtra and UP East circles. It has also retained Rajasthan from the earlier auction. So, overall, the telco will be able to provide services in nine circles.
  2. SSTL had deposited Rs. 613.75 crore for the auction, which made it eligible to bid for minimum quantum of 2.5 MHz spectrum (two blocks of 1.25 Mhz airwaves frequency) in 11 circles.
  3. Three bands — 800MHz (used for CDMA services), and 900 MHz and 1800 MHz (both used for GSM services) — were to be auctioned this month, but there has been lack of interest from telecom firms yet again, indicating that the government may have to cut down prices further to attract interest.
  4. The auction of the 1800 and 900 MHz bands has been postponed by the Department of Telecommunications (DoT). The reason, DoT said, is that no telecom firm has submitted an application to bid for these bands.
  5. The first round of auction for 2G spectrum held in November 2012 managed to raise just Rs. 9,407 crore for the government, less than a quarter of the Rs.30,000 crore that was expected.
  6. The sale of CDMA airwaves did not take place in November as the only two telecom firms that had submitted an application for this band – Videocon and Tata Teleservices – pulled out. Following the poor response, the government had approved a 30 per cent cut in the base price of spectrum in the 1800 MHz band in the Delhi, Mumbai, Rajasthan and Karnataka circles (there were no bidders for GSM spectrum in these circles). The government later also removed the cap on bidding for CDMA airwaves, allowing telecom companies to bid for all available slots. Earlier, existing telcos were allowed to bid for just one slot, and new telcos were allowed to bid for only three slots.
  7. In February, SSTL announced it was closing down operations in 10 circles – Assam, Andhra Pradesh, Bihar, Himachal Pradesh, Haryana, Jammu and Kashmir, Madhya Pradesh, the North East, Orissa and Punjab – and asked customers to switch to other telecom operators of their choice.
  8. Twenty-one of the company’s 22 licences were among the 122 permits cancelled by the Supreme Court on February 2, 2012, in the 2G spectrum allocation case. As per the order, all telcos will be able to continue operations only in those circles where they secure spectrum in the fresh auction.
  9. After today’s auction, the government will go back to the Supreme Court for further directions, Telecom Minister Kapil Sibal told reporters last week after a meeting of the Empowered Group of Ministers (EGoM) on spectrum, headed by Finance Minister P. Chidambaram. The EGoM was expected to discuss the timeline for a third round of auction as well as the inclusion of the 900 MHz band of airwaves. Both Bharti Airtel and Vodafone had opposed the inclusion of the 900 MHz band in the auction.
  10. The third round became necessary after the Supreme Court last month directed the government to auction the entire spectrum that was vacated by 122 2G telecom licences after the court ordered their cancellation on February 2. Although 514.8 MHz of spectrum was freed as a result of the cancellation of licences, the government put up only 271.25 MHz of spectrum for auction in November 2012. Following the Supreme Court order, DoT announced that a third round of auction would be held.