The Economics of Auctions
India's Spectrum: From 2G Scam to 5G Auction
India's 2008 first-come-first-served 2G allocation was cancelled by the Supreme Court, and later auctions raised huge sums, including about ₹1.5 lakh crore in 2022 for 5G.
A national lesson in auction design.
2008
2G licences were given first-come-first-served at 2001 prices, and the CAG estimated large notional losses.
2012
The Supreme Court cancelled 122 licences and ordered auctions.
3G and BWA
Auctions in 2010 raised over ₹100,000 crore.
2022 5G
A 2022 auction raised about ₹1.5 lakh crore, with Reliance Jio the biggest bidder.
A licence cancelled
A telecom firm loses its licence after the court's ruling.
Assuming an allocation method doesn't matter
It shapes revenue and fairness.
Key takeaways
- 2G was allocated first-come-first-served.
- The Supreme Court ordered auctions.
- 3G and BWA raised big sums.
- 5G raised about ₹1.5 lakh crore.
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