Why November 2G Spectrum Auction in India Flopped ?

The poor response to the 2G auction is not surprising given the current economic situation and poor investor sentiment, consultancy firm Frost and Sullivan said Friday.

“The results of the spectrum auctions are not too surprising, especially looking at the current economic climate, poor investor sentiment, significant existing debt burden on the telcom companies and low relevance of 1,800 MHz spectrum in the country when we are talking about a shift from voice to data,” Abhishek Chauhan, senior consultant, information and communications technology practice, Frost and Sullivan, said in a statement.

Referring to the union government’s plan to hold another round of auctioning for the leading circles that were not picked, Chauhan said: “The probability of garnering significant revenues looks a bit low amidst current circumstances.”

Contrary to expectations of collecting Rs.40,000 crore through the 2G auction, the government was able get only Rs.9,407 crore and Rs.7,936 crore through one-time fees in the 18 spectrum holdings.