New Delhi, Oct. 19: In a surprise move, Mukesh Ambani group's Reliance Infotel and Russian telecom firm Sistema have abstained from participating in the 2G spectrum auction beginning on November 12.
However, incumbent operators such as Bharti Airtel, Vodafone, Idea Cellular and Tata Teleservices (for CDMA), who had complained of a high base price of Rs 14,000 crore for 5MHz, submitted their application on the last day.
No new foreign operator has put in an application despite the government making special provisions for them.
Among the operators who lost their licences because of the February Supreme Court order, Norway's Telenor, whose 22 licences for the joint venture with realty firm Unitech were scrapped, has applied as an independent entity called Telewings.
Videocon made two applications ' one for GSM spectrum and the other for CDMA.
Apart from Sistema, Etisalat, Loop and S Tel are the other new licencees which decided to stay away. Reliance Communications, which offers both GSM and CDMA services, stayed away because of the firm's strained financial condition. Aircel is also going through a difficult patch and did not apply. Sistema operates in India in a joint venture with the Shyam group ' Sistema Shyam TeleServices (SSTL) ' which offers services under the MTS brand.
State-owned MTNL and BSNL said they would not participate as they had enough spectrum.
The DoT plans to conduct an auction in the 1,800MHz (GSM) and 800MHz (CDMA) spectrum bands so that companies that had lost their licences may win back some circles.
The cancelled licences include 22 permits of Uninor (joint venture between Unitech Wireless and Norwegian firm Telenor), 21 of Loop Telecom, 21 of Sistema Shyam, 15 of Etisalat DB, six of S Tel, 21 of Videocon, nine of Idea and three licences of Tata Teleservices.
Firms that have not filed their applications but want to buy airwaves can acquire existing firms once the auction process is completed.
Indications are that RIL can buy out Videocon as the FMCG company is reportedly being advised on the auction process by the Mukesh Ambani firm. Videocon chairman Venugopal Dhoot did not rule out such a possibility.
"We have a good friendship with RIL. We are always getting advise from them. I don't commit (what will happen in the future) but Mukesh Ambani's advise will continue. Yesterday only I met him," Dhoot told a TV channel.
RIL had not bid for BWA spectrum in 2010 but later went on to acquire Infotel Broadband, which had won a pan-India spectrum for offering high-speed Internet services. Operators cannot provide voice services using BWA spectrum.
Analysts said Reliance could bid for spectrum in the more efficient 900MHz band, which will be auctioned next year. Reports also suggest that Sistema is in talks to acquire a majority stake in Aircel.
Terming the high reserve price as the reason for firms staying away from the spectrum auction, telecom industry bodies today said operators saw no "business case" in buying airwaves at such a high price.
"We have always maintained that there will be muted demand for the auction process as the reserve price set by the government is too high," COAI director-general Rajan Mathews said.
SSTL today said it was awaiting the outcome of a curative petition filed in the Supreme Court.