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Govt hopeful of meeting Rs 40,000 crore revenue target with 2G auction

12 Nov 2012 Evaluate

The government will start 2G auction, the most ambitious one to garner Rs 40,000 crore revenue target it seeks to achieve by selling spectrum. The auction of the 2G spectrum freed from cancellation of 122 telecom licences by the Supreme Court in February will start at 9 am on Monday. The final price will then determine the amount that government will get from onetime levy on spectrum held by existing operators beyond 4.4 MHz.

Last week, the government has pushed through the proposal to refarm spectrum in the 900-MHz band to 1,800 MHz, allowing incumbent operators to keep only 2.5 MHz and has imposed a one-time spectrum charge on incumbent GSM operators for spectrum they hold beyond 4.4 MHz and 2.5 MHz for CDMA players. An auction base price has been fixed at Rs 14,000 crore for five MHz in the 1,800-MHz band, which is around seven times more than the price of Rs 1,658 crore at which telecom companies were allotted licences permits between 2001 and 2008.

The department of telecommunications (DoT) will only auction 370 MHz instead of the entire spectrum of 431 MHz freed from cancellation of licences, which belonged to eight telecom players, in a bid to attract high price. Though some telcos concern that the Supreme Court has asked the government to immediately explain why it is restricting the sale of airwaves in the upcoming auctions, and not selling all spectrum vacated by the 122 licences whose permits were cancelled earlier this year.

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