Telecom Lead India: 2G spectrum auction will be kicked off on Monday at 9 am as the India government targets to mop up Rs 40,000 crore revenue.
The controversial Supreme Court order in February affected business of 8 telecom operators and several thousands of jobs in the country.
For example, Tata Teleservices, which is not bidding for CDMA circles, is likely to cut staff in Assam and Northeast following its decision to wind up its loss-making CDMA-based mobile operations in these regions where it has 2.5 lakh customers, Economic Times reported.
The Maxis owned Aircel is also reducing its resources in several circles in India to improve profitability.
But Bharti Airtel’s total resources – in India and Africa – increased to 21,299 in September 2012 from 20,892 in June 2012.
Though the Supreme Court in February asked the Indian government to sell spectrum for 122 telecom licenses, the government is auctioning a maximum of 11 blocks of airwaves frequencies in each circle, excluding Delhi and Mumbai where there are only eight blocks.
Bharti Airtel, Vodafone, Telenor, Videocon and Idea Cellular are participating.
Loop Mobile, MTS India, Tata Teleservices, Reliance Communications, Reliance Industries, BSNL, MTNL and Aircel are absent from bidding.
Operators are cagey about bidding. Airtel chief Sunil Mittal last week said the auction is likely to end in first day itself due to lack of response.
TelecomLead.com last week reported that Tata Teleservices’ lack of interest in bidding was due to lack of viability in North-East, Assam and Jammu & Kashmir circles, where it has the lowest market share comparing with Airtel, Aircel, Vodafone, Reliance Communications and Idea Cellular.
Competing with incumbents for additional market share does not make sense (business) for Tata Teleservices. On top of this, there is an additional burden of huge spectrum fee. Tata Teleservices’ wireless market share in India is around 8.59 percent against Airtel’s 20.05 percent and Reliance Communications’ 16.55 percent.
The cancelled permits included Uninor’s 22 licences, Loop Telecom (21), Sistema Shyam (21), Idea Cellular including Spice Communications (13), Videocon (21), Etisalat DB formerly Swan Telecom (15), S-Tel (6) and Tata Teleservices (3 CDMA licences).
The government has fixed starting price for spectrum in the auction at Rs 14,000 crore for 5 Mhz of GSM spectrum on pan-India level which is around 7 times more than the price of Rs 1,658 crore at which telecom companies were given pan-India permits between 2001 to 2008.
