COAI not surprised by lukewarm response to 2G auction

The response to 2G auction has been very lukewarm. In an interview to CNBC-TV18, Rajan Mathews, directorate-general (DG), Cellular Operators Association of India (COAI) says the combination of the reserve price and the limited amount of spectrum was guaranteed to have a very detrimental impact on the auction. "We said that the high reserve price would ensure that there would be limited players coming into the market to bid. That's exactly what we have seen," he adds.

2G auction: Govt receives bids over Rs 9,200 cr on Day 1

Below is the edited transcript of his interview on CNBC-TV18.

Q: What are your initial thoughts on the numbers? There has been a formal briefing by the Department of Telecom. How has the auction panned out?

A: All along COAI has been saying that the combination of the reserve price and the limited amount of spectrum contrary, in our opinion, to the Supreme Court ruling was guaranteed to have a very detrimental impact on the auction. We said that the high reserve price would ensure that there would be limited players coming into the market to bid. That's exactly what we have seen. We also indicated that there would be extremely muted bidding. That's exactly what we have seen.

We indicated that there would be several circles that would have no bidders. That's exactly what we are seeing. So, in terms of what we had been saying all along, the outcome, which we are seeing, verifies and substantiates what we have been telling the government.

Q: What are your expectations with regards to how long this auction will continue? In 2010, we actually saw the auction last almost 35 days, almost 170 rounds of bidding. How long is this likely to proceed?

A: I will be surprised, if it will go on for any longer than a day or two. A quick close is something we had anticipated. So, that is not a surprise. You mentioned the difference between the 3G and the 2G auction process, very different set of circumstances. I think we very clearly learnt our lessons the hard way from the 3G bidding process. Ofcourse, there was an extreme shortage of spectrum in the 3G, very limited horizon in terms of what would be expected. So, there are very different set of parameters on 2G versus 3G.

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