The auction for third generation (3G) spectrum, starting today, is expected to see aggressive but not unrealistic bidding, according to experts tracking the sector.
Analysts say that auction in India is unlikely to go the European way where operators almost went bankrupt after bidding astronomical sums for 3G spectrum in the beginning of this decade.
“I don't think the bidding this time will be unrealistic for two reasons. Firstly, every company's board would have already set a maximum price it is willing to pay for the spectrum.
“Therefore, the CEOs and CFOs who will make the bids will be constrained by that limit.
“Secondly, there is no incentive to speculate as the full payment has to be made in less than a month. No company will risk bidding prohibitive amounts and then default and lose earnest deposits of hundreds of crores,” says Mr Mahesh Uppal, Director, Com First India – a telecom consulting firm.
3G actuion in India- Diffrent from Europe.
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