The Chronology:
August 31: Basic telephone services bids opened. Little known Himachal Futuristic Communications Ltd, in an alliance with Israel-based Beseq and Thailand-based Shinawatra, stuns industry with their Rs 85,000 crore bid which gives them highest-bidder status in nine circles.
November 2: Union Communications Ministry announces cap of three circles per bidder for both basic and cellular services. Rider attached to cellular services, compelling companies to retain circles where they have bid the highest. Speculation is rife within the telecom industry that the capping has been done to save Himachal Futuristic which could never have paid up the Rs 85,000 crore if it had to bid for all the nine circles.
November 11: Bolt from the blue for telecom companies. DoT announces rebidding in 10 basic telecom circles, as the highest bids were found to be "very much below reasonable levels" by the Tender Evaluation Committee. Disqualified circles include Tamil Nadu, Karnataka, Rajasthan, Madhya Pradesh, Himachal Pradesh, Uttar Pradesh east, Assam, Bihar, the North-east and the Andamans.
November 11 to 13: Communications Minister Sukh Ram, Telecom Commission Chairman R.K. Takkar and other top DoT officials go "underground." The nation left in the dark on the rationale for spiking the 10 highest bids.
November 14: Sukh Ram talks to select members of the press off-the-record, saying that changing of norms is perfectly jus-tified and that this will not shake foreign investors' faith in the privatisation process. But rules out disclosure of Government-decided reserve prices to companies involved in the rebidding for the 10 basic telephone circles.
November 15: Takkar reveals to two business newspapers and Outlook that the reserve price for each of the 10 circles up for rebidding would be announced and communicated to bidders within a few days.
The Bottom Line:
- Companies will have to bid afresh for 10 of the 20 basic telephone services circles.
- Companies will have to bid afresh for 10 of the 20 basic telephone services circles.
Himachal Futuristic will vacate five of the nine circles it won in the first round. Others will be asked to match Himachal’s bid figures. If they fail to do so, as is very likely, these five will also go into rebidding.
If companies fail to match the Government-decided reserve prices in their bids, there may even be another round of bids.
The whole rebidding process can take from eight weeks to six months, and can thus delay the privatisation process by up to even three years.
