Info-tech

Biggest telecom spectrum auction to kick off on Sept 29

Our Bureau New Delhi | Updated on January 17, 2018 Published on August 08, 2016

JS Deepak, Secretary, DoT

Govt pegs the base price of airwaves to be put on sale at ₹5.60-lakh crore

The biggest-ever auction for telecom spectrum in the country will start from September 29, putting on sale mobile airwaves worth around ₹5.60-lakh crore at the base price value, the government said on Monday.

“The amount of spectrum to be auctioned is more than any of the previous auctions and we believe that it will give an opportunity to bidders to acquire chunks of spectrum that will enable them to provide good quality service as per international benchmarks,” JS Deepak, Secretary, Department of Telecom (DoT), told newspersons here.

Releasing the notice inviting applications (NIA), Deepak said the pre-bid auction will be held on August 13, where various elements of the NIA will be discussed in detail.

“The inter-ministerial committee will supervise the auction (pre-bid conference) to interact with the perspective bidders, experts and others, and seek their comments and clarifications,” he said.

The total amount proposed to be auctioned is in 126 offerings of 2,354.55MHz in the upcoming auctions. This includes the spectrum as per TRAI recommendations — 700 Mhz, 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz and 2300 Mhz — and also the spectrum that has become available through the harmonisation process, he said.

For the first time, the government has also promised to assign spectrum within 30 days of making an upfront payment by successful bidders, compared with four-five months earlier.

As per rules, telecom operators winning spectrum in 700MHz, 800MHz and 900 MHz bands will have to pay at least 25 per cent of the bid amount within 10 days of the conclusion of the auctions. The rest will have to be paid in 10 annual instalments after a two-year moratorium.

For the other bands, at least 50 per cent will have to be paid.

The government has reduced the interest on instalments to 9.3 per cent from about 10 per cent earlier. The lock-in period of spectrum holding by an operator is now one year, instead of two earlier.

Also, the spectrum usage charge has been fixed at 3 per cent for existing and new spectrum, which is lower than the 5 per cent in the 2015 auctions.

The reserve price of the 700 MHz band –– the most expensive –– has been fixed at ₹11,500 crore per MHz.

For spectrum in the 900 MHz band, 800 MHz band, 2100 MHz band and 2300 MHz band, the reserve price was fixed at ₹3,341 crore, ₹5,819 crore, ₹3,746 crore and ₹817 crore, respectively.

But while the government is optimistic about the auctions, the operators do not seem as enthusiastic, said analysts.

“In the upcoming auction, the spectrum is not for renewal and, therefore, the operators are unlikely to bid aggressively as they would buy spectrum for new services or augment their spectrum holding,” Hemant Joshi, Partner, Deloitte Haskins & Sells LLP, said.

The operators will choose spectrum based on availability, pricing and the band which will fit to their current spectrum holdings, he added.

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Published on August 08, 2016
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