2G auctioneer likely to get only Rs. 2.6 crore as fees

E-Procurement Technologies, which along with Times Internet conducted the just-concluded 2G auction, will get around Rs. 2.6 crore as fees or 90 percent lower than sum received by the auctioneers for 3G airwaves sale in 2010.

Global investing banking giant NM Rothschild and its partner DotEcon got Rs. 30.5 crore for conducting 3G and wireless broadband spectrum auction in 2010. The auctions had garnered over Rs. 1 lakh crore.

On the other hand, the 2G auction fetched the government only Rs. 9,407.64 crore.

"We were to get Rs. 5 crore fixed component for both (1800MHz -GSM and 800 Mhz -CDMA) the auctions. The 800MHz band auction has failed. Therefore, we will get only Rs. 2.5 crore as fix component from auction of 1800 MHz and Rs. 10 lakh drop dead fee due to failure of 800MHz," E-Procurement Technologies' Vice President Suraj Radhakrishnan told PTI.

He said the company did not quote any amount as variable fees which is a percentage of money that the auctioneer is supposed to get on the difference between the auction- discovered price and the reserve price.

"In any case it would have not benefitted us. We wanted to conduct this auction for experience. We were doing it for first time and got tremendous support from DoT and Inter- Ministerial Committee which enabled us to do it in a very short duration," he said.

Out of 22 telecom circles in the country, bids were received for 18 circles only in the recently concluded 2G auction. Participating companies won spectrum at reserve price fixed by government in 17 circles.

It was only in Bihar that final bid price reached Rs. 46.43 crore per block of spectrum compared to Rs. 42.51 crore fixed by the government.

There were no bids received for the airwaves frequencies in Delhi, Mumbai, Rajasthan and Karnataka. Radhakrishnan could not immediately recall the amount, if any, that will be paid to the company for the failure of auction in these circles.

On this poor response to spectrum auction, Telecom Minister Kapil said "Market dynamics should be allowed to let themselves paid out. The moment you start in a sense whether directly or indirectly dealing with the market and guiding it in a particular way, will always have lot of trouble which is bound to happen."

High base price of Rs. 14,000 crore for 5MHz of pan-India airwaves is seen as main reason for auction failure.

The Minister has said that it was fixed as per the order of Supreme Court which cancelled 122 telecom licences.