why 2G Auction failed

Blaming flawed executive action as the reason for the poor outcome, Rajan Mathews, Secretary General, Cellular Operators Association of India (COAI) said, “The government had decided the amount of spectrum that had to be put up for auctions. I don’t believe that was specified by the courts. The reserve price was not something that the Supreme Court specified — that is something that the government accepted in terms of its deliberations.”

Leading jurist, Harish Salve, who has been deeply involved in the 2G litigation, also slammed the government. He said, “From the legal point of view they have very few options left. The government repeatedly painted itself into a corner.” In a statement that pointed to the government’s weak defence in Supreme Court, he said, “The government almost did not defend the 122 licences in court.”

The COAI, whose members primarily led the bidding said, “The results have been exactly what the industry had predicted. All along, the COAI has maintained that the reserve price was guaranteed to have a detrimental effect on auctions. That it would ensure that there were limited players coming into the market to bid and had also indicated that there would be extremely muted bidding, and for several circles there would be no bidders at all.”

“The root of problem lies with the procedure adopted by the government in executing the auctions. The COAI is in agreement with Supreme Court that auction is the best and the most transparent way to determine the allocation and market price of a resource as rare as spectrum for commercial use,” the COAI said in a statement.