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Nov 15, 2012, 03.30 PM | Source: Moneycontrol.com

2G auction flops, peeved Kapil Sibal picks on CAG

The government had put on auction more than half of the spectrum that was freed from Supreme Court in February this year cancelling 122 mobile permits issued by the then Telecom Minister A Raja to nine telecom companies in 2008.

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2G auction flops, peeved Kapil Sibal picks on CAG

The government had put on auction more than half of the spectrum that was freed from Supreme Court in February this year cancelling 122 mobile permits issued by the then Telecom Minister A Raja to nine telecom companies in 2008.

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Moneycontrol Bureau

Telecom minister Kapil Sibal believes, the now flopped 2G auction, would have gotten easily Rs 1 lakh crore worth of bids if the government was given a freehand in policy making.   

"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 then it will be bad. The government’s wisdom should only intervene when required. The purpose of the government is to ensure development and to ensure prosperity. We are not here to feel vindicated," he told reporters a day after the 2G auction concluded.

The government had put on auction more than half of the spectrum that was freed from Supreme Court in February this year cancelling 122 mobile permits issued by the then Telecom Minister A Raja to nine telecom companies in 2008. The Comptroller and Auditor General of India (CAG) had in 2010 said Raja's decision to give away spectrum at rates fixed in 2001 had caused a presumptive loss of Rs 1.76 lakh crore to the exchequer taking the price garnered in the 3G auction as the benchmark.

The government thereafter fixed a base at a rate almost equivalent to the third-generation (3G) auction price. Further, as the government has promised to refund the license free paid in 2008, the net gain to the exchequer may be almost nil. Dismissing allegations that companies colluded with the government, Sibal said "We have done exactly what the courts asked us to do. Infact the court asked us to sell (spectrum at a minimum price of) Rs 18,000 crore, we brought the price down because we wanted to sell, we wanted companies to buy."

"If we had fixed it at Rs 18,000 crore in terms of what Trai had recommended, this (even Rs 9,407 crore ) would not have been fetched," he added. Telecom Minister Kapil Sibal indicated that high base price was fixed due to order of apex court in 2G scam case. "The judgement of the court said procedure of the 3G auction is to be followed and we went to Trai. The Trai made those recommendations and Trai fixed it (pan-Indian spectrum base price) base at Rs 18,000 crore (for GSM) and for CDMA Rs 36,000 crore," Sibal said.

On spectrum that remained unsold in the 2G auction, Sibal said: "Of course there will be an auction. There is no doubt about that. What procedure we follow for that auction is something that we will decide in another few weeks."

The unsold spectrum , however, firms up government plans for refarming (redistribution) of spectrum at the time licences come up for renewal. Since spectrum has remained unsold in Delhi, the government may allocate airwaves frequencies to Tata Teleservices at old rates to start its services in this circle, sources said.

The final result of auction will be declared by Department of Telecommunications in the next couple of days after taking comments from the inter-ministerial group that was handling auction process and design.

(With inputs from PTI)

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