The much-talked about 2G mobile phone spectrum auction on Wednesday virtually flopped with just Rs. 9,407 crore being garnered in the process contrary to the high valuation estimated by the CAG in its damning report of the government two years ago.
The auction, which lasted just two days, got total bids worth Rs. 9,407.64 crore, Telecom Minister Kapil Sibal told reporters at the end of the bidding, which was a far cry from the 35-day bidding for the 3G spectrum in 2010 that got Rs. 67,719 crore.
The government was targetting a minimum of Rs. 28,000 crore from the sale of 2G spectrum in the GSM band and the tepid response may upset its efforts to meet the revised fiscal deficit target of 5.3 percent of GDP. Overall, the government had budget Rs. 40,000 crore as revenue from spectrum sale this fiscal.
Sibal refused to comment on the CAG's estimation of Rs. 1.76 lakh crore as the loss to the exchequer in giving away spectrum on first-come-first-serve basis in 2008.
In an apparent dig at the CAG, he merely said, "the facts are before the nation and quite clear."
Going by the 3G auction price, the current sale should have fetched Rs. 1 lakh crore but "what we have got is Rs. 9,407 crore... so this is a market and that is how it plays itself out."
None of the five companies bidding for the spectrum made any offer for pan-India airwaves for which the reserve price was set at Rs. 14,000 crore, a rate considered high by the industry.
Sibal said in all 101 out of the 144 blocks of spectrum on offer got bids.
Metro cities of Delhi and Mumbai, which accounted for 40 percent of the base price of Rs. 14,000 crore for 5MHz of 2G spectrum, drew no bids.