Fresh auctions by the government to sell 2G telecom spectrum received a thumping response on Monday, the first day of a round aimed at ending the controversy over airwaves that landed the UPA government in a scandal amid corruption charges.
Bids were received for all 22 circles from eight bidders in the open-ended auction.
Telecom minister Kapil Sibal said first-day bids will bring smiles to the finance minister, operators and the consumer. “The worst is over for India telecom,” he told HT.
On current indications, the bids would be good news for the fiscally strapped government to raise resources to plug its deficit, while telecom operators could head back to business as usual — albeit with higher debt raised to fund the purchase.
The highest bids went for West Bengal, Bihar and UP West, besides Delhi, Mumbai and Kolkata. The government is hoping to raise `40,874 crore from spectrum auctions and telecom licence fees this year, which would accrue over a 10-year period.
The first day attracted bids for at least Rs. 11,300 crore, but ministry sources said it has already crossed the overall target.
“It was quite satisfactory,” MF Farooqui, telecom secretary, told HT. “Going forward, we will have to see how the bidders perform.”
Leading telecom stocks fell by up to 3% on fears of rising costs for service providers. Shares of Bharti Airtel, Ideal Cellular and Reliance Communications fell between 2 and 3%.
A department of telecommunications official said: “This (auction) is significant, but, it is early days yet, bidders can opt out.”