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Government unsure of meeting telecom spectrum auction revenue target

Government unsure of meeting telecom spectrum auction revenue target

By Press Trust of India | Updated: 8 July 2013 12:10 IST

With two rounds of auctions of telecom spectrum flopping due to high price, Finance Minister P Chidambaram is unsure if the Rs. 40,847 crore target through the process for current fiscal will be met.

"Some of it (spectrum revenue target) is current revenue that is the licence fee, the spectrum usage charges so some of it is current revenue which will come from people who already have spectrum. What is in doubt is only the fee that I will get through the auction. But an auction will take place and some revenue will come," he told PTI.

In 2012-13 fiscal budget, the government had set Rs. 40,000 crore from spectrum sale through auction. However, the estimate was scaled down to Rs. 19,440.67 crore following tepid response to the auctions.

The government had set a reserve price of Rs. 14,000 crore for a slot of pan-India spectrum kept for auction. The price was set at par with CAG's assumed value of Rs. 1.76 lakh crore for 2G spectrum allocated to telecom companies in 2008.

The auction, however, could fetch government only a meagre sum of Rs. 9,407.64 crore.

The Finance Minister said that the government had reduced the price of spectrum put for auction but even there had been no bidders for certain airwaves.

"We started with a recommendation of TRAI which said that the reserve price should be around Rs. 18,000 crore.

Cabinet lowered it to Rs. 14,000 crore. Then we calculated for the 900 megahertz, I think that was fixed at some Rs. 11,200 crore. Then we calculated the 800 mhz (CDMA) which was fixed at half of it. There were no takers at that price," he said.

Government again placed unsold spectrum worth Rs. 45,000 crore for auction in March 2013 after reduction in base price but only Sistema Shyam Teleservices made bids worth Rs. 3,693 crore for CDMA spectrum.

"The last rounds of spectrum auction exploded the myth that there was a loss of Rs. 1.76 lakh crore. All those who believed in that myth must now realise that was a myth," Chidambaram said.

Chidambaram said the government has now referred the matter to sector regulator TRAI for its recommendation on the price before going in for the third round.

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