India said on Friday it will consider re-auctioning mobile phone spectrum that remained unsold in a sale this week when the financial situation of its telecoms companies improves.
The government raised $9.9 billion from a spectrum auction that ended on Thursday, but there were no takers for the most-efficient yet priciest 700 megahertz band of airwaves and only 40 percent of the total on offer was sold.
Indian telecoms services are among the cheapest in the world, making margins relatively lower than elsewhere and putting pressure on carriers’ finances, with local ratings agency ICRA forecasting their combined debt to rise to 4.25 trillion rupees ($64 billion) after funding the latest sale.
“If their financial situation is not good, and they can’t buy it now, what is the guarantee that they will be able to if we do another auction immediately,” Telecoms Minister Manoj Sinha told reporters, when asked about the unsold airwaves.
“So, we will take the appropriate decision at the appropriate time.”
Telecoms Secretary J.S. Deepak separately told Reuters that the ministry was on course to achieve its revenue target set by the finance ministry, despite earning far less than he budgeted 645 billion rupees from the auction.
Deepak said the government will decide later on whether to consider cutting the price of the 700 band airwaves.
The telecoms ministry will get a minimum of 320 billion rupees upfront as carriers are allowed to pay in instalments.
Vodafone Group Plc was the top spender in the auction with 202.8 billion rupees worth of bids, followed by Bharti Airtel’s 142.44 billion rupees, according to government data released on Friday.