The government's hopes to make the next spectrum auction successful are set to be shattered with SSTL reportedly to bid for only seven out of 11 circles it applied for.
According to a Hindustan Times report, SSTL may only bid for only seven circles, which may put pressure on the government's revenues from the spectrum sale. The total revenue the government fetches will depend on the category of circles for which SSTL will bid. SSTL has applied for the airwaves in 800MHz band.If reports are to be believed, Sistema Shyam Teleservices Ltd (SSTL) is unlikely to to bid for all 11 cricles for which it had submitted applications last month. It's notable SSTL is the sole bidder for the 2G spectrum auction, slated to be held this month, after the companies failed to submit documents to participate in the spectrum auction within February 25 deadline.
Last month, the government was compelled to shelve the second round of spectrum auctions after GSM operators didn’t apply for the spectrum auction.
Despite the government's revised reserve price for the spectrum, pricing is however believed to be the main reasons behind the débâcle. Moreover, the complexity of the spectrum auctions haven't helped much. The last auction had seen more than half of the spectrum going unsold with operators citing steep pricing.
The telecom operators' absence is also being suspected as cartelisation. "The conspicuous absence of bidders for the second round of 2G auctions is a clear case of caterlisation by operators to force the DoT into a corner and bring it to the negotiating table to use the clause of 10-year automatic extension of licence. However, the government has brought this upon itself through improper application of Supreme Court judgement," BK Syngal, the former chairman and managing director of VSNL, is quoted as saying.
Courtesy: ThinkDigit
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