The auction for 2G spectrum which will begin on Monday is likely to evoke dull response with Tata Teleservices and Videocon having already withdrawn from CDMA spectrum auction in the 800 MHz band and no one bidding for pan-India airwaves.

According to experts, this is going to downsize Government’s target of garnering Rs 40,000 crore from the auction.

Bharti, Vodafone and Idea Cellular, Telenor and Videocon , are participating in the GSM auctions, and none of them are bidding for a pan-India airwaves.

There are several challenges that the government is facing on the auction front. Apart from several legal battles related to policy decisions, the government has to deal with possibilities of tariff hike that the operators are pressing for in the wake of steep hike in the reserve price for spectrum in near future.

Then, there is severe criticism that the government is facing on the issue of not selling all spectrum vacated by companies whose permits were cancelled earlier this year. Only 271 MHz have been put on sale against the 430 MHz of 2G airwaves freed following the cancellation of 122 spectrum licences allotted during the tenure of the former telecom minister A Raja.

If the government is directed by the court to sell all spectrum, it will upset its plans on refarming. Refarming involves redistribution of the highly efficient airwaves in the 900 MHz band, largely held by incumbents such as Bharti Airtel, Vodafone and Idea.

The EGoM’s decision to allow the GSM operators to retain only 2.5 MHz of the more efficient 900 MHz frequency at market rates at the time of licence renewal is likely to be challenged.

Earlier this month, GSM operators' body COAI had slammed the move saying that the regulator TRAI did not have proper consultation with all stakeholders on the issue of spectrum refarming, particularly its impact.

It said that the government is handling the issue in non-transparent manner. It urged the regulator and DoT to look at the issue in a “holistic, transparent, comprehensive and consultative manner”.

"COAI reiterates that no proper consultation with the stakeholders has ever been carried out by the TRAI on the issues involved and the impact of re-farming, although TRAI acknowledges that it has significant impact on live networks, coverage and connectivity for hundreds of millions of mobile subscribers," COAI said in a statement.