Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

India's telecom auction raises 25 percent of target  Join our daily free Newsletter

MENAFN - AFP - 14/11/2012

No. of Ratings : 0
Add to Mixx!


 


(MENAFN - AFP) India's government announced on Wednesday it raised just one-quarter of what it expected from an auction of mobile spectrum -- a setback industry critics blamed on excessively high pricing.

Prime Minister Manmohan Singh's government hoped to raise 400 billion rupees (7.2 billion) from the sale of second-generation (2G) spectrum to help close a gaping budget deficit.

Instead it collected 94 billion rupees in the auction that ended after two days when offers dried up.

"This is a market and that is how it plays itself out," Telecom Minister Kapil Sibal said after the sale was over.

The Cellular Operators Association of India branded the sale a "failure" that it attributed in a statement to an "artificially high reserve price that bore no congruence to market realities".

Fierce competition has eroded profits of India's once-vibrant telecom industry which has also been buffeted by regulatory upheaval.

The auction was held after the Supreme Court earlier this year cancelled 122 licences for eight firms, saying the 2008 sale of the permits had been tainted by corruption that cost the treasury as much as 39 billion in lost revenues.

A slew of people including a former telecoms minister, senior bureaucrats and corporate executives, have been charged with corruption over the 2008 sale that has ballooned into one of India's biggest-ever political scandals.

The tepid response from telecom companies to this week's auction contrasts with the 2010 sale of faster third-generation (3G) mobile airwaves that lasted more than a month in which the government raised over 12 billion.

Critics said the government-set starting price of 140 billion rupees for a slot embracing all of India's 22 telecom zones -- over seven times what companies paid in 2008 for 2G bandwidth -- was too costly and deterred bidders.

Two foreign operators -- Norway's Telenor and Britain-based Vodafone Group -- and three domestic firms -- Bharti Airtel, Idea Cellular and Videocon Industries -- took part in the auction.

The sale was key for Telenor's Indian unit and Videocon, which both had their airwaves taken away, as well as for Idea Cellular, seven of whose licences were revoked.

Telenor won spectrum in the six most populous zones but gave up its wider India footprint and said it expected its Indian operations to break even in 2013. Videocon won permits in six zones while Idea got back licences in the seven it lost.

Bharti and Vodafone were unaffected by the court order but wanted more bandwidth to improve service as firms battle to sign up new clients in the world's second-largest cellular market.

Vodafone won spectrum in 14 circles while Bharti got spectrum in one, according to provisional results on the telecom ministry website.

A number of telecom firms stayed out of the auction because of the high base price including Russsia's AFK Sistema, which had its Indian spectrum cancelled by the Supreme Court. It is appealing the court decision.


 






  MENA News Headlines


 






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country
Marketwatch News
UPI News
Comtex News

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Investment Game
Economic Calendar
Financial Glossary

My MENAFN
Portfolio Tracker

Voting

Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help