for maximum of two blocks in a telecom area.
Since there has been partial impact on permits of Idea Cellular, the company will need to bid for at least four blocks of spectrum, amounting to 5 Mhz of airwaves, in seven telecom circles to continue its operations.
These circles include Tamil Nadu (including Chennai), Kolkata, West Bengal, Orissa, Assam, North East and Jammu and Kashmir service areas. In rest of the circle, Idea Cellular can bid for maximum of 2 blocks only like Airtel and Vodafone.
Industry experts, however, are pessimistic over whether the auction can fetch government the Rs 40,000 crore target it seeks to achieve by selling spectrum.
"The government itself recognises that they are not going to get anywhere near Rs 40,000 crore, will be lucky if they get half of that amount, so we think that somewhere between Rs 19,000-20,000 crore might be the amount that the government will actually bring in," COAI director general Rajan S Mathews said.
Bharti group Chairman Sunil Bharti Mittal has said that the auction will be over on first day. The last auction held by government of 3G and Wireless Broadband spectrum jointly took around 50 days to end.
Auction for another set of airwaves frequencies required for CDMA services has already failed after two applicants, Tata Teleservices and Videocon withdrew from it.
The government priced CDMA spectrum 1.3 times higher than GSM spectrum. This auction could have fetched government at least around Rs 13,000 crore.
Citing recommendations of Telecom Regulatory Authority of India (Trai) to fix minimum price of CDMA spectrum at double the price of GSM spectrum, Sibal said that the Empowered Group of Ministers' realised that there will be no taker for these airwaves at Rs 28,000 and hence it lowered it to 1.3 times instead of double price.
"If we go below Rs 18000 crore we go below Rs 16,000 crore then what will you say. Then you will say that you have again undersold, there is yet another scam. The minister is favouring somebody," Sibal said.
SSTL, which run services under brand name of MTS, did not participate in the auction as it is waiting