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Rs 9,225 cr on Day 1 of 2G auction

New Delhi: The government on Monday received bids worth Rs 9,224.75 crore on the opening day of auction for 2G mobile phone spectrum that drew scant interest due to high base price.

There was no bidder for pan-India airwaves for which the government had set a base or bid start price of Rs 14,000 crore. Demand was concentrated in select circles like Gujarat, Uttar Pradesh (East) and Uttar Pradesh (West).

Of the 22 telecom circles, which cover the entire nation, bids were received for 18, with Delhi, Mumbai, Rajasthan and Karnataka which had the highest base price drawing a blank.

"Seven rounds of auction completed today. Auction incomplete and will continue on Wednesday. 98 blocks committed as against 176 blocks offered," Telecom Secretary R
Chandrashekhar said.

The bids received for the airwaves amounted to Rs 9,224.75 crore at the end of last round of auction for the day. In the seventh round, there was no bids received for spectrum in UP (W) and Gujarat circle as well.

COAI General Secretary R S Mathews said, "The limited amount of spectrum, contrary in our opinion to the SC ruling, was guaranteed to have a very detrimental impact on the
auction."

"We said that the high reserve price would ensure that limited players come into the bid and that is exactly what we have seen," he said, adding COAI had rightly predicted no bidders for several circles.

The auction, he said, would not last more than two days. In the seventh round less demand for spectrum was seen in most of the circles, except in Bihar where bids were received for all 8 blocks put up for auction.

The last round of the day saw demand for 7 blocks in Assam, 6 blocks each in Haryana, Madhya Pradesh, Jammu and Kashmir, Odisha,West Bengal and North East.

Maharashtra telecom service area received bid for 5 blocks. Andhra Pradesh, Kolkata and Tamil Nadu circle received bids for half of the 8 blocks of spectrum available for bidding.

Uttar Pradesh (E), Himachal Pradesh, Kerala and Punjab received bids for only one block. Earlier demand was seen for 10 blocks in UP (W), 9 blocks in UP (E) 7 blocks in Assam.

Telecom experts are of the view that the auction price may not meet revenue target set by government and even adversely impact revenue target of Rs 31,000 crore set by it from one-time spectrum for excess spectrum held by telecom operators.

"The government may have to face issues regarding market discovery of price regarding excess spectrum that operators hold specially in circles where there were no bids and issues regarding the governments overall revenue generation target wherein there is a large gap to bridge," Protiviti

Consulting's Country Managing Director Mritunjay Kapur said. Sources said the auction has drawn scant interest so far as the base price for 5 MHz of GSM radiowaves or spectrum in all the 22 zones is more than seven times of what the companies paid in 2008.

Chairman of Bharti Airtel, the nation's largest telecom company, Sunil Bharti Mittal had last week said the auction would be over on first day itself because of the high base price.

Bharti Airtel, Vodafone, Idea Cellular, Norway's Telenor and Videocon are bidding for GSM, but there are no bidders for the CDMA spectrum after Tata Teleservcies and Videocon pulled out of the race.

(Agencies)

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