The 2G spectrum auction was successful this time because the government lowered reserve prices significantly from previous auctions to attract more bidders. Eight companies participated in the auction and total revenue was Rs. 61,162 crore, much higher than estimated. This will help the government meet fiscal targets as telecom minister and finance minister will be happy with the higher than expected revenue from the auction. Winning bidders included Airtel, Vodafone, Idea, and Reliance Jio.

2. Need For Auction

3. Prime Reason
• 2G spectrum had to be auctioned afresh after the
Supreme Court ordered in 2012 the cancellation of 122
licences issued in 2008 by then Telecom Minister A
Raja.
• The Supreme Court held that the process used by him to
allot licences was "illegal" and ordered a new auction.
• Auctions in November 2012 and March 2013 flopped as
most bidders stayed away from the sales, complaining
that the floor bid prices were too high.
• The eight bidders applied to participate in the current
auction after the government sharply cut auction reserve
prices

4. The Participants

5. Why 2G Auction worked this time
• The reserve fee must be set as low as possible —
just high enough to cover the basic cost of the
resource, but low enough for it to attract as many
bidders as possible. That's what the government
managed this time. As telecom minister Kapil Sibal
told this paper, "We took the bold step of
rationalising reserve prices.
• To be sure, DoT has lowered reserve fees after
each failed round. When it started auctions for 1800
MHz spectrum in November 2012, it kept the
reserve fee at an eye-popping Rs 14,000 crore for a
5 MHz pan-India block.

6. Cont...
• As a result, bidding was lacklustre earning for the
government just Rs 9,704 crore. There were no bids in
the four major circles of Delhi, Mumbai, Karnataka and
Rajasthan. Worse, there were no bids received in the
800 MHz spectrum
• In the present round, DoT was forced to reduce the
reserve fees further. The 1800 MHz reserve fee was
lowered by a further 26% and the 900 MHz one by 50%.
It's a result of these reductions that the auctions are
seeing traction.

7. Results of Auction
• At Rs. 61,162 crore, the government's
total revenue from the auction is much
higher than its initial estimate of about Rs.
41,000 crore.
• The licences won today will be valid for a
period of 20 years. The companies need
pay only a quarter to a third of the winning
auction price upfront and the remainder
through to 2026.

8. Cont...
• Eight companies, including Bharti Airtel, Vodafone, and
Reliance Industries Ltd, had applied to bid in the auction
of 900 megahertz and 1800 megahertz band airwaves.
The 900 megahertz band was auctioned only in three
cities - Delhi, Mumbai and Kolkata
• In the 1800 MHz band, Airtel won in 15 circles, Vodafone
in 10 and Idea in 11.
• The Mukesh Ambani-backed Reliance Jio bagged 1800
MHz band in 14 circles out of the 22 on offer. This will
help the company to not only offer data but also voice
services in these regions. Reliance Jio had earlier won
the rights to offer 4G broadband services across the
country

9. Cont
• At a minimum, the government will get an
estimated Rs. 18,200 crore this fiscal,
much higher than budget estimate of Rs.
11,300 crore, according to Telecom
Secretary M F Farooqui.
• Idea Cellular bagged the circles of Andhra
Pradesh, Delhi, Gujarat, Haryana,
Karnataka, Kerala, Madhya Pradesh,
Maharashtra, Mumbai, North East,
Punjab.

10. Telecom Minister's Views
• Telecom Minister Kapil Sibal
said, "We will see a smile on
Finance Minister Mr
Chidambaram's face." Mr
Chidambaram faces a
challenge to meet the budget
deficit target for the current
fiscal year ending in March
amid a shortfall in tax
collections and revenue
receipts from divestment of
stake in state companies; he
will welcome the higher-than-
expected revenues from the
spectrum auction.

11. 176 - Nishant M.B
177 - Shreerang C
178 - Soniya K
179 - Anjali K
180 - Sanjeevani B