Telenor seeks to join 2G airwaves auction

A visitor rests under a Telenor Group sign at the GSMA Mobile World Conference in Barcelona February 18, 2009.

MUMBAI/OSLO (Reuters) - Norway's Telenor(TEL.OL) has applied to take part in the 2G spectrum auction, opting to stay in the country despite being stripped of its permits after a scandal-tainted previous sale.

Telenor joins India's top three operators by revenue in eyeing the 2G radio waves, though Russian conglomerate Sistema's (SSAq.L) Indian affiliate Sistema Shyam TeleServices Ltd, which also lost its permits obtained in 2008, said it would not be participating.

The auction for 1800 MHz mobile phone band is the result of a Supreme Court order to revoke permits issued in the earlier auction. Friday is the deadline for submissions to take part in the auction, scheduled to start from November 12, from which the government is hoping to raise 400 billion rupees.

Bharti Airtel (BRTI.NS), Vodafone's (VOD.L) India unit, Idea Celluar (IDEA.NS) and Tata Teleservices TATASL.UL, have also submitted applications to participate in the auction to be held next month, sources told Reuters.

Conglomerate Reliance Industries (RELI.NS), which was widely expected to participate in the auction, has not submitted an application, a senior government source told Reuters.

Reliance Communications (RLCM.NS), India's fourth-largest mobile provider by revenue, also did not submit an application, the source said, adding that Videocon Telecommunications (VEDI.NS), whose 2008 permits were cancelled, has applied to bid for both GSM and CDMA airwaves.

Videocon Chairman Venugopal Dhoot was not immediately available for comment. Reliance Industries and Reliance Communications declined comment when contacted by Reuters.

Telenor said a final decision on whether to participate would be taken before the auction starts, adding it was searching for a new Indian partner in place of its previous partner Unitech (UNTE.NS).

Vodafone and Bharti are not affected by the court order but could be looking to buy additional spectrum to feed their overstretched networks in the world's second-biggest mobile phone market.

Bharti will only bid for GSM airwaves in four to five zones and not for all of India, a company source who declined to be named told Reuters.

The government has set the auction base price at 140 billion rupees for 5 MHz of 2G airwaves in the 1800 MHz band for all of India's 22 telecoms zones.

By comparison, carriers paid 16.58 billion rupees for 4.4 MHz of airwaves bundled with their permits in 2008 and the same price in 2001. India's state regulator criticised the 2008 sale price as "unbelievably low".

(Reporting by Devidutta Tripathy and Aradhana Aravindan in Mumbai, Balazs Koranyi in Oslo and Maria Kiselyova in Moscow; Writing by Henry Foy; Editing by David Holmes)