The just-concluded 2G spectrum auctions failed to meet government's expectations, prompting many to predict that the government will have to lower the price in key telecom circles if it really wants to sell remaining spectrum.
The 2G spectrum auction generated merely Rs 9,407.64 crore in revenue for the government, less than a quarter of the previous estimate of more than Rs 40,000 crore.
Speaking on the topic, an expert said, "This pricing anomaly arose in the 3G auctions because of the way the auctions were designed. And since the 3G auctions were used as a base to calculate the base price for the 2012 auctions, the anomaly has been carried forward."
The Department of Telecom (DoT) is now expected to ask telecommunications regulator TRAI to reconsider pricing of the spectrum, and the regulator is expected to lower the pricing, particularly in those circles where no bid was placed during the recent auction.
The regulator is expected to reduce the price of spectrum in four circles, viz. Delhi, Mumbai, Rajasthan and Karnataka.
Following the potential revision of the pricing, Tamil Nadu will be the most expensive circle, followed by Delhi. Mumbai and Rajasthan should emerge as the fifth and tenth most expensive circles.