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BW Businessworld

Triggering A New Debate

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On 2 February, the Supreme Court cancelled 122 telecom licences granted by former telecom minister A. Raja, and ordered that fresh licences be auctioned off. The ruling has stirred a debate on whether licences for mining too should be auctioned. While experts are divided on whether auction is the best way forward on the spectrum issue, in the case of mining it seems to be the best option. It could lead to greater transparency, more competency and better revenues.

But an auction has its flip side as well. Estimates of the quantity and quality of the ore being auctioned may not always be accurate. There is another danger: Indians are still new to auctions in most sectors — from spectrum to road projects — and end up bidding very high. This, in turn, leads to the "winners curse" and defaults. The way out is to create a good auction environment with proper and transparent rules.

STRICTLY BUSINESS

Nokia seems to be becoming more Asian than Finnish. The world's largest handset maker is planning to cut 4,000 jobs at its plants in Finland, Hungary and Mexico and move its assembly units closer to component suppliers in Asia.

(This story was published in Businessworld Issue Dated 20-02-2012)