Modi Government Approves Next Round Of Telecom Spectrum Auction, To Take Place In March With 2251.25 MHz On Offer At Rs. 3.92 Lakh Cr Reserve Price

The Union Cabinet, chaired by the Prime Minister Narendra Modi, today (Dec 6) approved a proposal of the Department of Telecommunications to conduct spectrum auction through which spectrum will be assigned to the successful bidders for providing commercial mobile services.

The Union Cabinet approved the auction of 2,251 megahertz of spectrum by the end of FY2020-21, Telecom Minister Ravi Shankar Prasad said during a press briefing on the cabinet decision.

A total of 2251.25 MHz is being offered with total valuation of Rs. 3,92,332.70 crore (at reserve price). The auction will be for spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz frequency bands. Spectrum will be offered for assignment for validity period of 20 years.

“This month itself we will issue notices inviting applications, and the auction will be carried out in March,” Prasad said during the briefing.

Successful bidders may pay entire bid amount in one go (upfront) or may exercise an option to pay a certain amount (25% for spectrum won in 700 MHz, 800 MHz, 900 MHz bands or 50% for spectrum won in 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands) upfront and remaining amount in a maximum up to 16 equated annual instalments, after a moratorium of two years.

In addition to the bid amount, successful bidders will also have to pay 3% of the Adjusted Gross Revenue (AGR) excluding wireline services as spectrum usage charges for the spectrum won through this auction.

During the action, bidders will have to comply with parameters and conditions e.g. block size in which bidders will be able to submit their bids, spectrum cap i.e. the maximum amount of spectrum that can be held by each bidder after the completion of the auction, roll-out obligations, payment terms etc.

In the Union Budget 2020-21, the government had targeted a revenue of Rs 1.33 lakh crore from telecommunication services, which includes spectrum auction proceeds, licensing fees and other receipts.