LIVE: 2G auction may bring 50% target money at Rs 20,000 crore to government

Telecom Lead India: The government is likely to mop up around 50-60 percent (around Rs 20,000 crore) of its target from 2G spectrum auction.

Despite cold response from the entire mobile industry, the telecom ministry headed by Kapil Sibal has set a target of Rs 40,000 crore from the 2G auction.

Kapil Sibal Telecom Minister of India

Earlier today, reported that around 50 percent dip profit margin and the recent scams have made Indian mobile market unattractive to global investors. Profit margin issues will have a long term impact on India. However, India’s mobile market will bounce after some time, industry experts warned.

Net profit margin is giving an alarming picture to the mobile industry in India. “It is one of the lowest in the world. But India’s growing economic conditions has the potential to create a strong mobile market in the long run,” said Neeraj Arora – director Internet Business Solutions Group, Asia Pacific Japan and China, Cisco Systems.

Earlier, the industry was expecting that Mukesh Ambani’s presence in the 2G ring would bring cheers to the government.

Even there were indications that Videocon Telecommunications would be bidding on behalf of Reliance Industries.

Sources said there are no takers for spectrum in category A circles like Delhi, Mumbai, and Karnataka, which account for 70 percent of the base price.

Third round of spectrum auction ended before 4 pm.

In 2010, when 3G and BWA spectrums were sold, the response was good and the government mobilized more than Rs 100,000 crore.

The base price is Rs 14,000 crore for 5 mhz of spectrum.

Though the Supreme Court in February asked the Indian government to sell spectrum for 122 telecom licenses, the government is auctioning a maximum of 11 blocks of airwaves frequencies in each circle, excluding Delhi and Mumbai where there are only eight blocks.

Bharti Airtel, Vodafone, Telenor, Videocon and Idea Cellular are participating.

Loop Mobile, MTS India, Tata Teleservices, Reliance Communications, Reliance Industries, BSNL, MTNL and Aircel are absent from bidding.

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