India planning a third round of spectrum auction

Telecommunication towers are pictured through hanging flower pots at a residential building in Kolkata December 11, 2012.

NEW DELHI (Reuters) - India plans to hold a third round of auction of unsold mobile phone airwaves in 18 telecommunication zones immediately after it completes a sale in other zones in March, to comply with a court order, a senior government official said on Monday.

The telecommunications ministry is also considering increasing the quantum of airwaves it has put on block in the Karnataka and Rajasthan zones in the auction due in March, R. Chandrashekhar, secretary at the ministry said.

The Supreme Court last week directed the government to auction all airwaves that would be vacated after cancellation of 122 zonal permits, which it had earlier ordered to be revoked after a massive scandal over a 2008 sale.

Sale of mobile radio spectrum along with stake sales in state-run companies is crucial for the government's plan to cut its fiscal deficit. But an airwave auction in November raised less than a quarter of its target of $7.4 billion as companies stayed away saying the minimum bid price was too high.

The government is auctioning airwaves in March in four zones -- Delhi, Mumbai, Karnataka and Rajasthan -- that did not get any bids in the November auction.

Chandrashekhar said the quantum of airwaves being sold in the Delhi and Mumbai zones were already compliant with the court order.

(Reporting by Devidutta Tripathy; Editing by G.Ram Mohan)