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Sistema becomes the only operator in India with CDMA spectrum

The only bidder for CDMA frequencies in India has unsurprisingly obtained spectrum in eight of the country’s 22 telecom circles.

Sistema Shyam TeleServices, the Indian operation of Russian group Sistema, did not need to exceed the base price of INR36.39 billion ($670 million) for the blocks; the starting bid had already dropped following the November 2012 auctions in which no firms bid for the CDMA spectrum, which was deemed overpriced.

The Indian Supreme Court ruled in February 2012 that nearly all of the country’s 2G spectrum licences were void as the issuing process was invalid. Prior to their cancellation, Sistema’s operating permits covered 21 of the country’s telecom circles.  

In order to compensate for the $300 million it paid for its previous licences, Sistema has narrowed its focus, eliminating 10 circles from its operation and deliberately avoiding certain specific areas, including Mumbai.

The Supreme Court’s decision to cancel 122 licences last year was largely due to the belief that the permits had been undervalued. However, the Indian government may have overestimated how much operators were willing to pay, with November’s 2G auction raising less than 25% of US$7.4 billion goal. Inflated reserve bids are a key complaint, with many operators refraining from bidding at all.

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