<p>Things have finally begun to move on the much delayed auction of 2G spectrum. On 6 August, Times Internet Ltd, Gurgaon, (TIL) was issued a letter of intent to be the auctioneer. This is a follow-up to the Cabinet announcing the base price for nationwide spectrum at Rs 14,000 crore last week.<br /><br />In all, there were three technical bids for the spectrum auction. The bidders included Times Internet, Gurgaon; Karnataka State Electronics Development Corporation and NCDEX Mumbai. However, the financial bid of only Times Internet was opened.<br /><br />This time round, fewer companies were in the fray to be auctioneers than in 2010 when the 3G auctions were conducted. The auctioneer's fee is fixed as a percentage of the difference between the base price and the closing price. With the base price at a much higher Rs 14,000 crore, the expectations are that the final price will not be too high. As a result, few companies showed interest to be the auctioneer.<br /><br />It is believed that the Empowered Group of Ministers will seek an extension of the August 31 deadline for the auctions at its next meeting scheduled for 7 August morning. The auctioneer will have to come up with an Information memorandum to conduct the auctions first. <br /><br />On 3 August, the Cabinet, headed by Prime Minister Manmohan Singh, decided to fix the reserve price at the lower end of the Rs 14,000 crore to Rs 15,000 crore band that was recommended by the EGoM.<br /><br />The Cabinet approved the levy of an annual spectrum usage charge of 3 to 8 per cent on different slabs of revenue as was recommended by the EGoM headed by finance minister P Chidambaram.<br /><br />The reserve price fixed was a disappointment for the telecom industry which had been pitching for a 80 per cent cut in the Rs 18,000-crore reserve price suggested by the Telecom Regulatory Authority of India (Trai) which they felt would lead to up to 100 per cent hike in mobile telephone charges.<br /><br />The auction is crucial for companies like Uninor and Sistema Shyam Teleservices, who have time till September 7 to offer their services after which they will be forced to close down their operations in case they fail to get a licence.</p>
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