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Ravi Shankar Prasad says telecom auction may fetch over Rs. 1 lakh crore

New Delhi: Ravi Shankar Prasad, Telecom Minister, expects aggressive bidding in the upcoming spectrum auction. There is a "compelling business case" for companies to own airwaves on the back of a projected explosion in data

India TV Business Desk [ Updated: February 28, 2015 10:35 IST ]
ravi shankar prasad says telecom auction may fetch over rs.
ravi shankar prasad says telecom auction may fetch over rs. 1 lakh crore

New Delhi: Ravi Shankar Prasad, Telecom Minister, expects aggressive bidding in the upcoming spectrum auction. There is a "compelling business case" for companies to own airwaves on the back of a projected explosion in data demand and so expectation is sky high.

A Supreme Court order on Thursday putting curbs on declaring the auction results had created uncertainty in the industry over the sale process, but the minister said bidding will commence as scheduled on March 4.

The court allowed the government to go ahead with the auction. But the order that the auction results can be declared only with the court's approval has left many uncertain.

The order also said that no winner can claim any "equity" just because it won a bid. Most operators were unsure what the court implied by the term "equity" and what will be the impact on the final outcome of the auction. The next hearing is on March 26.

Prasad said the auction's design and guidelines strictly adhered to the government's intent of conducting a free and fair auction, but "all participants have the right to go to Supreme Court, if they feel otherwise".

If companies become wary because of the uncertainty following the court order, and therefore stay away from aggressive bidding, the government may lose out on revenue that is key to meeting its fiscal targets. A part of the auction proceeds is expected to be realised before this fiscal year ends on March 31, and a delay in finalising the winners could mean that won't happen either.

The minister said he still expects telecom companies to bid fiercely for the spectrum. For this, he cited the earnest money they have deposited.

In January, the telecom and defence ministries resolved an eight-year-old stalemate under which the defence agreed to vacate a slot of the 2100 Mhz band to the telecom department. 3G allows for faster mobile broadband which contributes as much as three-fourths of incremental revenue to the operators.

 

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