Next round of India's telecom spectrum auction to begin on September 29
Touted to be the largest-ever, the next round of India's spectrum auction is set to begin on September 29, Telecom Secretary J.S. Deepak announced today.
A Notice Inviting Application (NIA) was today released by the Department of Telecommunications (DoT) for the auction.
"The spectrum auction will start on September 29 and the total amount of spectrum that will be offered is 2,354.55 MHz," Deepak said.
"This include the airwaves recommended by Telecom Regulatory Authority of India (TRAI) as well as the spectrum that became available through harmonisation process," he told reporters at a press meet here.
The 2,300-plus MHz of airwaves on the block for telecom operators is in seven bands -- 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz -- as against 470.75 MHz in the previous round, which is set to fetch the exchequer $17 billion during its tenure.
The government has decided to allot the right to the spectrum won through auction for 20 years.
Deepak said government has harmonised 197 MHz of spectrum in 1,800 MHz band and 37.5 MHz in the 800 MHz band. "The government is offering additional 234.5 MHz airwaves for auction in these two bands at a reserved price of Rs 27,000 crore."
Overall, based on the reserve price, the mop up is expected to be Rs 5.66 lakh crore.
Deepak said operators will have the choice of both upfront and installments options. The service providers who win airwaves below 1 GHz bandwidth will have to pay 25 per cent upfront, and those winning above that the upfront payment will be 50 per cent.
"One new bidding-friendly measure the government has adopted this year is that spectrum won will be assigned within 30 days from the date of upfront payment. Interest on deferred payment, linked to base rate, will be 9.3 per cent this year against 10 per cent in 2015," he said.
"For the successful bidder, the lock-in period of equity in the company has been reduced to one year instead of earlier stipulation of minimum period of 3 years or completion of roll out obligation, whichever is later," he added.
In a meeting of the cabinet in June, chaired by Prime Minister Narendra Modi, an official nod was given for the reserve price and the auction norms. This was followed by a similar nod last week for spectrum usage charge at 3 per cent of a telecom company's adjusted revenues.
A highlight of the auction will be the auction of the 700 MHz band for the first time -- touted as the most efficient airwave range for data services -- but also with doubts over adequate takers due to the high base fixed by the government.
The industry watchdog had suggested Rs 1,595 crore per MHz base for this band, which translates into a reserve price of Rs 11,485 per MHz for a pan-India footprint.
A pre-bid conference between the government and industry stakeholders will take place on August 13. Further bidder has the opportunity to submit its queries by Aug 19 and the DoT will issue clarification by August 29.