India left with no bidder for part of 2G airwaves auction

NEW DELHI Mon Nov 5, 2012 9:42pm IST

1 of 2. A Master of Business Administration (MBA) student talks on a phone as he stands outside a classroom during a break at the Management Development Institute (MDI) in Gurgaon, on the outskirts of New Delhi May 2, 2012.

Credit: Reuters/Adnan Abidi/Files

Related Topics

Stocks

   

NEW DELHI (Reuters) - India has been left with no bidders for part of an upcoming cellphone airwaves auction after Tata Teleservices became the second company to drop out of the process.

India's sixth-biggest mobile phone carrier by customers pulled out on Monday after smaller rival Videocon Telecommunications dropped its interest earlier in the CDMA-based (Code Division Multiple Access) mobile phone services.

The telecoms ministry had planned to hold two separate auctions for airwaves used by GSM and CDMA-based mobile phone carriers hoping to reap a combined 400 billion rupees to plug a high fiscal deficit.

"Now there is no bidder left for CDMA. We will have to take a call on what to do," said a senior government official, who declined to be named, as the information is not yet public.

The official confirmed that Tata Tele and Videocon had withdrawn their applications to bid for CDMA airwaves.

A high auction starting price has deterred bidders, according to analysts.

The auction for GSM airwaves is scheduled to start from November 12 and was to be followed by the CDMA airwaves auction.

The auctions were organised after the Supreme Court ordered all cellular permits to be revoked after a flawed state sale in 2008.

Tata Tele is set to lose its operating permits in three of India's 22 telecoms zones and was looking to buy back airwaves in those zones.

A source with direct knowledge said the company did not see "a strong business case" in buying back airwaves in those zones.

Videocon Telecommunications Ltd had applied to bid for both GSM and CDMA airwaves. The company remains in the race for GSM airwaves after withdrawing from CDMA airwave bidding, the government official quoted earlier said.

Norwegian telecoms group Telenor (TEL.OL) and India's Idea Cellular (IDEA.NS), which were affected by the court order, have applied to bid for GSM airwaves in the auction.

Indian mobile market leaders Bharti Airtel (BRTI.NS) and Vodafone's (VOD.L) local unit were not affected by the court's decision but are bidding in the auction to buy extra airwaves.

The government has set a base price of 140 billion rupees for 5 mega hertz of GSM airwaves in all the 22 zones -- more than seven times what companies paid in the 2008 grant process. The base price of CDMA airwaves had been set 1.3 times the GSM airwaves.

(Editing by Mike Nesbit)

FILED UNDER:
  • Most Popular
  • Most Shared

Reforms Plan

REUTERS SHOWCASE

Border Talks

Border Talks

India names Ajit Doval as special envoy for China border talks.  Full Article 

WTO Deal

WTO Deal

U.S. seeks to step up India trade talks  Full Article 

Phone Masts

Phone Masts

American Tower to buy Bharti Nigeria phone masts for $1.1 billion  Full Article 

Infrastructure Plan

Infrastructure Plan

India targets private cash to build railways to its ports.  Full Article 

Shadow Banking

Shadow Banking

Reserve Bank planning more measures for NBFCs.  Full Article 

Auto Sector

Auto Sector

Hyundai Motor, Kia Motors lift 2014 global sales target on China, emerging markets  Full Article 

Oil Prices

Oil Prices

Some fund managers see oil falling to $60 without OPEC cut.  Full Article 

Project Shelved

Project Shelved

Jindal Steel shelves $10 bln project after coal setback.  Full Article 

Market Eye

Market Eye

Sensex, Nifty rise to record after China, ECB stimulus boosts risk appetite.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage