New Delhi: The latest 2G spectrum bid failed to retrieve even 10 per cent of the total scammed loss of Rs 1 lakh 76 thousand crore. The bidding process that took place on Monday, remained in the fainted foil with the telecom companies giving least importance to the bidding. One of the highly speculated reasons for this drought in the interest is considered to be less popularity of the 2G as compared to the ultra-high speed 3G network.
The government had high expectations that the bid would be able to fetch at least Rs 40 crore to retrieve the early setback given caused due to the multibillion scam. But the returns were of just Rs 9 thousand 200 crore after a six round bid.
Now, with no options left, the government is planning to come down on the prices for the bids in the infamous 2G spectrum. As per the sources, the government may think to revise the reserve prices of the allocation.
As per the COAI's Rajan Matthew, the high end reserve price is the reason for the company's disinterested approach. The bidders did not rise for the bids for Delhi, Mumbai, Rajasthan and Karnataka circle. UP West fetched most number of bid making it to 10 blocks. UP East and Gujarat remained on the second podium respectively. For the GSM band, Airtel, Telenor, Idea, Videocon, and Vodafone came up with the bids but the CDMA band remained unsold.
As per the company's, the base price of Rs 14, 000 crore was too high for 22 circles' bids. If the finance experts are to be believed, the Indian economy is on decline which showed in the 2G spectrum bidding. With 3G services in demand in India, the 2G is on decline. Not just this, the reports have also said that the country might witness the maiden 4G experience in the coming year. With this, the bid prices that were in 2008 are much lower now.
Sibal was referring to Rs.9,400 crore ($1.74 billion) which the winning bids will fetch the government, as opposed to expectations of as much as Rs.40,000 crore ($7.4 billion) or more on the basis of presumptive loss which India's official auditor had once estimated.
The government had fixed the reserve price for the spectrum at Rs.14,000 crore ($2.59 billion).
The communications minister also took a dig at the estimates of the Comptroller and Auditor General of India (CAG), which at one point had embarrassed the government no end, and said all this has resulted in no benefits to the consumer.
"We are not here to score points. Our point always was that market dynamics should be allowed to play out. The moment you start dealing with market directly or indirectly it will be bad. The government's wisdom should only intervene when required," he said.
"The purpose of the government is to ensure development and to ensure prosperity. We are not here to feel vindicated," he said.
"The consumer has not benefited at all because the nature and the kind of investments that ought to have gone into the sector have stopped and the sector has been in debt," he added.
The bid completely failed as neither had it lasted long nor did it fulfill the wish list of the government. This resulted in the 1/3 parts of the total revenue expectations. As per the Information and Broadcast Minister Kapil Sibal, the bid has given back just Rs 9, 407 crore. The companies will have to deposit 33% of the total amount within the 10 days' time.