Second round of 2G auction on 11 March: Sibal

The second round of 2G spectrum auction will begin on 11 March, the empowered group of ministers on telecom headed by finance minister P Chidambaram decided today.

The reserve price of the 800 MHz band, used for offering CDMA-based mobile services, is likely to be reduced by 30-50 per cent from the last round. The cabinet will take a final call on this issue.

"All auction will be held in March," telecom Minister Kapil Sibal said after the EGoM meet in New Delhi. He said bidding for the 800 MHz band will take place in all the circles.

There were no takers for CDMA spectrum in the last round of auction in November. With the reserve pegged at 1.3 times higher than that of 1800 Mhz GSM spectrum, both Tata Teleservices and the Videocon group pulled out of the auction after showing initial interest.

The last round of spectrum fetched the exchequer just Rs9,407 crore, as against the government's expectations of around Rs28,000 crore. Most bidders and analysts put the poor response down to inflated reserve prices - The pan-India reserve price for 5 Mhz of spectrum in 1800 Mhz band was fixed at Rs14,000 crore.

The Supreme Court in February last year had cancelled 122 telecom licences awarded in 2008 under dubious practices. This included the CDMA licences of Sistema Shyam Teleservices, majority owned by Russia's Sistema, in 21 telecom circles and Tata Teleservices in three circles (See: SC cancels all 2G licences, orders fresh spectrum auction).