2G auction: 2nd round ends with dull response

Telecom spectrum auction opened Monday to a lukewarm response with key circles such as Delhi and Mumbai finding no takers in the initial rounds. There were no applications for pan-India spectrum, the base price for which was set at Rs 14,000 crore that the industry said was too high. The government was looking to raise Rs 40,000 crore from the auction.

At the end of the first round, sources said there were no bidders for Delhi, Mumbai, Rajasthan and Kolkata circles. There was some interest for spectrum for Uttar Pradesh (East) circle at the end of second round in the afternoon.

India is divided into 22 telecom circles. Companies can bid for circles that remain unsold in the initial rounds.

Sources said the auctions has drawn scant interest so far as the base price is much higher than what the companies paid in 2008. The base price of Rs 14,000 crore for 5 MHz of GSM radiowaves or spectrum in all the 22 zones is more than seven times what the companies paid in 2008.

Sunil Bharti Mittal, Chairman of Bharti Airtel, the nation's largest telecom company, had last week predicted that the auction would be over on first day itself because of the high base price.

Bharti Airtel, Vodafone, Idea Cellular, Telenor and Videocon are bidding for GSM, but there are no bidders for the CDMA spectrum after Tata Teleservcies and Videcoon pulled out of the race.

The auction will continue till 1930 hours.