Below is an edited transcript of the experts' analysis on
CNBC-TV18.
Q: Are you actually surprised that Reliance has stayed away?
Shetty: Yes, I'm a bit surprised because there were some rumors about the fact that they would want to bid on a pan-India basis. I also think that today the first priority for Reliance is really to roll out operations. And spectrum is not scarce for them today. They would rather roll out the BWA (broadband wireless access) operations and then may be in a year or two, they can always look at an alliance or a partnership with someone else.
Q: Speaking of alliances and possible partnerships, is there a Videocon -Reliance partnership in the offing?
Shetty: It is possible because Videocon, even while earlier participating in the 2G auction and rolling out operations, was looking at a partner and at that time, probably for a foreign partner. But yes, that is a possibility.
Q: Do you think that this is a bit of a damp squib? Do you think that the response has been along expected lines? Do you believe it is muted with only six companies having so far expressed their willingness to participate?
Sachdeva: I would definitely say the response to the auction is muted. We would have expected at least two, if not three, more bidders at least from the operator whose licence has been cancelled and probably it would have been good, from a foreign direct investment perspective, if one of the foreign operators would have actually bid for the auction. So, from our perspective, I would say the response is muted.
Q: Sistema Shyam, whose licence has been cancelled, has decided to stay away. The company is clearly unhappy with the course of events have panned out and have said that it will wait to hear from the Supreme Court as far as their curative petition is concerned before they take any decision on operating in India. What is your opinion?
Shetty: To be honest, I think it is on expected lines and I did not expect any foreign operator to participate for a couple of reasons. One, the reserve price is very high at Rs 14,000 crore for 2G. Two, at the end of the day the regulatory uncertainty is significant. So I really did not expect anybody, especially a foreign player, to actually participate. Sistema was a surprise because it has large amount of investments in India. The Russian government actually backs Sistema as it has a shareholding in it. So there is a bit of a surprise, that they did not actually participate in the auction.
Another possibility could be that the company might have a deal or something else and therefore they may not be participating in this auction, that could be the only reason. But otherwise, I really did not expect anybody to participate across circles.
Q: The government still feels confident that it is going to be able to meet the revenue projection that it had set out for itself. It has very clearly acknowledged the fact that it doesn't expect this to mirror the 3G auctions in any fashion. Do you believe the government is going to be able to at least get to that Rs 40,000-crore target?
Shetty: It is going to be nowhere close to the way the 3G auctions went. There are just six telecoms participating for the four slots available. Therefore, the bidding won't be aggressive and is going to be selective. I don't know if the Rs 40,000-crore which the government has set will be achieved.
I think the revenue will be probably be lesser than that. Participants will be very cautious because the implications are not just about paying Rs 40,000 crore, it is also about the one-time fee and spectrum refarming.
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