Russian telco sole bidder for Indian spectrum rights

Russian telco Sistema's Indian arm has emerged as the sole bidder in India's 2G mobile spectrum auction, after other operators pulled out due to the high cost of the frequencies coupled with low revenue prospects.

The Hindu reports that Sistema Shyam Teleservices (SSTL) bid 36.4 billion rupees (A$650 million) for paired 1.25 MHz bands in the 800 MHz radio frequency spectrum, allowing it to operate CDMA services in eight areas in India, including Delhi.

SSTL lost its spectrum rights last year after the Indian Supreme Court cancelled 21 licenses allocated to the CDMA operator in 2008, after corruption allegations surfaced.

As SSTL has not renewed all its rights, it will close its operations in three areas in India including Mumbai where it has 1.5 million subscribers The Hindu writes.

In February this year, Vodafone group chief executive Vittorio Colao said the reserve price for the auction was set too high and that there was a misconception in India as to the value of the spectrum.

The Indian government had put up 61 blocks for auction and had hoped the proceeds would help reduce the country's budget deficit.

However, the results from the 2G auction means India will earn less than expected from spectrum auctions, matching the experience of the UK government which announced that it had received £1.16 billion less than forecast in its 4G spectrum sale last month.