CDMA auction abortive as Tata pulls out

Tata Teleservices Ltd (TTSL) on Monday withdrew its application for participating in the 2G auction, leaving no takers for spectrum in the 800MHz CDMA band. Videocon, the only other potential buyer of CDMA spectrum, had pulled out last week.

This deals a blow to the government's plans to garner up to Rs18,000 crore in the 800Mhz spectrum sale. The base price of 800MHz was fixed at 1.3 times that of 1,800 MHz for GSM services, which was Rs 14,000 crore for 5 MHz of pan-India spectrum. This pegs the price of each 800 Mhz block at Rs4,550 crore.

The Department of Telecommunications (DoT) had fixed on Monday as the last day when operators could withdraw bids for which they had furnished earnest money.

All the bidders for the 1,800 GSM have stayed put. These are Bharti Airtel, Vodafone, Idea Cellular, Telewings, the new company floated by Telenor, and Videocon.

However, as reported earlier, the government's hopes of garnering Rs40,000 crore from the overpriced spectrum sale remains elusive. Based on the earnest money deposits made by the bidders, most experts admit that except for two or three circles, the auction will be over in only a few rounds, if not the first round itself.
 
The amount it will actually get from the sale is estimated at between Rs15,000 crore and Rs21,000 crore. This is because most of the bidders do not require much additional spectrum to what they already have.

While the total base price of the spectrum up for grabs in the 1,800-MHz band is around Rs 35,000 crore, based on the circles operators have bid for, the government would not garner more than Rs21,000 crore at the most optimistic estimate.