The 2G spectrum auction for CDMA services kicked off today with the only player Sistema Shyam Teleservices (SSTL) bidding for eight circles. So far, SSTL has auctioned for spectrum worth Rs. 3,639 crore. According to reports, the company had deposited Rs. 613.75 crore for today’s auction, which made it eligible to bid for minimum quantum of 2.5MHz spectrum (two blocks of 1.25MHz airwaves frequency) in 11 circles.
According to a Business Standard report, SSTL bid for three blocks in each of eight circles, including Delhi. The company did not apply for Mumbai. The base price per block for Delhi is Rs 450.49 crore while for Mumbai base price is Rs 441.00 crore.
The second round of spectrum auction is ongoing and is expected that the sale will end after the third round, possibly the shortest online sale of radiowaves in terms of time consumed.
SSTL, which operates its services under the MTS brand, had initially applied for licences in 11 circles but was rumoured to apply for seven circles. SSTL’s move to scale back is expected to further pressure on the government’s revenues from spectrum sale.
SSTL’s application for only eight circles means curtailing of the company’s operations in three more circles. The company has already announced shutting down operations in 10 out of 22 telecom circles namely Assam, Andhra Pradesh, Bihar, Himachal Pradesh, Haryana, Jammu and Kashmir, Madhya Pradesh, North East, Orissa and Punjab.
Back in November, no player turned up for 800MHz spectrum CDMA auction mainly due to steep pricing.
The government had priced the spectrum at Rs 9,000 crore for a pan-India allocation of 2.5MHz each. However, none of the major CDMA operators Reliance Communications, Tata Docomo and MTS didn’t turn up for the auction, compelling the government to slash base price CDMA spectrum by up to 50 percent.