India's CDMA auction plans in disarray

Tata Teleservices has followed in the footsteps of Videocon Telecommunications to pull out of the upcoming CDMA spectrum auction, leaving the Indian government's plans to generate revenue from the license sale in tatters.

Reuters reported Monday Tata Teleservices, India's sixth-largest mobile operator by customer volume, will not be bidding for the 800 megahertz (MHz) airwaves. It had originally planned to buy back the operating permits in 3 of India's 22 telecoms zones after the Supreme Court revoked the existing 122 2G licenses earlier in February.

An unnamed source told the news agency that Tata Teleservices did not see a "strong business case" in buying back the bandwidth in these areas.

The company's decision leaves India's Department of Telecoms in a limbo. It had scheduled for two separate auctions for airwaves used by GSM and CDMA mobile phone carriers to reap a combined INR 400 billion (US$7.4 billion) to help plug the government's high fiscal deficit, Reuters noted.

"Now there is no bidder left for CDMA. We will have to take a call on what to do," said a senior government official, who declined to be named. He also confirmed both Tata Teleservices and Videocon had withdrawn their applications to bid for the CDMA bandwidth.

The spectrum auction was scheduled for Nov. 12, and companies will get to bid for the 1800MHz bandwidth first. The CDMA auction was to have taken place two days after the 1800MHz auction is closed.