India telecoms auction raises $10bn from mobile firms

India's mobile phone firms have bid almost $10 billion (£6 billion) in a key auction for the country's second-generation (2G) telecoms licences. The amount far exceeded the government's target of $1.8 billion, and will be used to shrink its budget deficit. The government will get at least $3 billion initially as companies have to pay up to a third of the winning price now, with the rest by 2026. The winners included Bharti Airtel, Vodafone and Reliance Industries. The success of this auction is in marked contrast to earlier auctions in November 2012 and March 2013, which both flopped. Then, most bidders stayed away, complaining that the minimum prices for bids were too high. Eight companies had applied to bid in the current auction for the 900 MHz and 1800 MHz band airwaves after the government sharply cut the minimum reserve prices. Finance Minister P Chidambaram faces a challenge in meeting India's budget deficit target for the current financial year. This is due to a shortfall in both tax collection and also income from the sale of stakes in government-owned companies, according to a news agency.