New Delhi, October 7: Blame it on high reserve price or failed judgment of regulator authorities or government, the largest telecom spectrum in India virtually failed to draw enough bids and closed on Thursday three days ahead of the schedule.
At the end of five days spectrum auction, it drew bids worth Rs 65,789 crore which was only 40 per cent of the total worth of spectrum that was placed on the block. Around 60 per cent of mobile airways remained unsold.
There were literally no takers for the 700 Mhz and 900 Mhz bands during the course of the five days. The 700MHz band alone was expected to fetch Rs 4 lakh crore for the government. They were termed pricey by the bidders.
“Bids worth about Rs 65,789 crore were received at the end of 31 rounds for 965 Mhz of spectrum out of total 2,354.55 Mhz put for auction,” revealed the officials.
While the government had placed Rs 5.63 lakh crore worth of spectrum for sale from October 1 for next 7 days but the bids were closed due to dormancy of the bids. Even on Thursday the bids dipped initially and picked up bit later on.
The debt-ridden telecom industry was “cautious” in the auction and mainly opted for low-priced spectrum to improve mobile service quality so as to lead to next generation services. India is world’s second largest telecom market and the industry showed much interest in 2100 Mhz (3G/4G) band, 2500 Mhz (4G) band and 800 Mhz (2G/4G) bands.
As per Indian Credit Rating Agency or ICRA, the consolidated debt of the telecom industry was staggering Rs 3,80,000 crore in December 2015 as against Rs 2,90,000 crore in March 2014. The government seriously misjudged in the spectrum auction. It is expected that the 700 Mhz and 900 Mhz would be placed for lesser price in future or at least the bidders would wait until the price drops.