Auction of 2G spectrum begins, no CDMA spectrum auction for now

Auction of 2G spectrum begins, no CDMA spectrum auction for nowThe much-awaited auction for 2G telecom spectrum has finally started and five operators, viz. Bharti Airtel, Videocon, Vodafone, Idea Cellular and Telenor are contending for Global System for Mobiles (GSM) airwaves. But no auction is currently taking place for Code Division Multiple Access (CDMA) airwaves because no operator has bid for this sort of airwaves.

The last bidder for CDMA spectrum - Tata Teleservices - pulled out of the CDMA auction previous week. It means the government will fall short of its target of pocketing Rs 40,000 crore in revenue from the auctions.

But, Telecom Minister Kapil Sibal has already announced that the telecom ministry would go back to the Cabinet with a proposal on what should be the basis the fees for CDMA spectrum.

Speaking on the topic, Sibal said, "On the CDMA issue, we will come back to the Cabinet because there is no auction discovered price now, but that does not mean they can get away without paying a price."

A base price of Rs 14,000 crore per 5 mega hertz of GSM spectrum has been set for all the twenty-two zones. The new base price is more than seven times of what operators paid in 2008.

Sunil Bharti Mittal, chairman of India's biggest mobile carrier Barti Airtel, had last week criticized the new reserve price set for airwaves, saying it was too high and that the auction would be over on the very first day itself.

The new auctions were planned after the Supreme Court of India ordered all spectrum permits to be cancelled after a blemished state sale in 2008.