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Nov 20, 2012, 09.39 AM IST | Source: CNBC-TV18

Govt was handicapped; need to reassess auctions, says Sibal

Reacting to the Supreme Court’s observations telecom minister Kapil Sibal told CNBC-TV18's Shereen Bhan the DOT secretary will file an affidavit. Sibal blamed the circumstances for the outcome of the 2G auction and said the government was handicapped over the issue of pricing.

We were bound by a final order from the Supreme Court and within the limited space that we had, we did what we could.

Kapil Sibal

Telecom Minister

The Supreme Court has come down heavily on the government over the 2G auction. The court slammed the centre for its "casual approach" to the sale of spectrum.

Reacting to the Supreme Court's observations telecom minister Kapil Sibal told CNBC-TV18's Shereen Bhan the DOT secretary will file an affidavit. Sibal blamed the circumstances for the outcome of the 2G auction and said the government was handicapped over the issue of pricing.

He feels the auctions should be designed as per the present situation and future needs. The government has garnered a modest Rs 9,407.64 crore from 2G spectrum bids, much less the Rs 40,000-crore (the target was later lowered to Rs 30,000 crore) the Centre had been hoping to raise from the 20-year lease-out of scarce radio waves.

The industry had complained that the reserve price of Rs 14,000 crore (for 5 MHz) for a pan-India licence fixed by the government was too high and that was what kept the bidders away. However, Sibal believes that lowering of the reserve price would not have netted more money. He had earlier said the outcome of the spectrum auction was a result of "market dynamics at play".

Sibal also "completely rejected" ex- BPL Telecom chief Rajeev Chandrasekhar’s views that "the minister and government did very little real work to revive the confidence of new foreign investors and operators in the sector post the scams and controversies of 2010".

"It seemed clear the auctions were going to end in failure. This may sound harsh, but the efforts of the ministry and reactions after are almost as if they wanted it to fail to score some points. In the weeks preceding the auction, there is ample evidence that the large existing telcos were talking down the auction, with open statements that the auctions would not go beyond the first day," Chandrasekhar told Business Standard newspaper.

Chandrasekhar said the new telecom policy didn't address any of the specific concerns of investors and that there was no attempt or effort to strengthen the independent regulatory framework, which he felt, was critical for long term investors especially when there is so little time left in this government’s term. "Bottom line, the failure of the auction is a sign of no-confidence in the political management and leadership of the sector," Chandrasekhar told the newspaper in an interview.

However, according to Sibal, Chandrasekhar's views have "no basis". "The government does not have roadshows when it knows they aren't necessary," he told CNBC-TV18 in the interview.

He said the government will assess if it needs to go to TRAI on reserve price recommendations. "We have talked to AT&T and Docomo to get them to invest in telecom," he informed. 

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