NEW DELHI: Cabinet accepted the telecommunications department’s proposal on upcoming spectrum auctions at its meeting on Wednesday, which would include a 4G wave-only sale and take place in March.
Telecommunications and IT Minister Ravi Shankar Prasad said the government will auction a total of 2,251.25 MHz of spectrum in the 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz and 2500MHz bands. 2,251.25MHz will be offered. MHz with a total rating of Rs. 3,92,332.70 crore (at reserve price).
The Department of Telecommunications will issue Notice Invitation Applications (NIA) of telecommunications companies for the auction process within this month.
“By winning the right to use the spectrum through the auction, incumbent telecommunications service providers will be able to increase the capacity of their network, while new players will be able to start their services,” the government said in an official statement.
Selected bidders can pay the full amount of the bid at one time (in advance) or they can exercise the option of paying a certain amount (25% for spectrum won in 700 MHz, 800 MHz, 900 MHz bands or 50% for spectrum gained in 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands) in advance and remaining amount in a maximum of up to 16 equal annual quotas, after a two-year moratorium.
In addition to the bid amount, selected bidders will also be required to pay 3% of Adjusted Gross Revenue (AGR) excluding fixed telephony services as spectrum usage charges for spectrum won through this auction.
“In the auction, the bidders must comply with the parameters / conditions, for example, the size of the block in which the bidders will be able to present their bids, the spectrum limit, that is, the maximum amount of spectrum that each bidder can have after the completion of the auction, deployment obligations, payment terms, etc., “the statement said. Trai had lowered the prices of most bands from those set in the previous sale in October 2016.
For 700 MHz, which was not sold in the previous auction, the authority proposed to reduce the base price by 43% to Rs6,568 crore per unit, or Rs32,840 crore for a 5 MHz block.
The radio wave base rate on the efficient 800 MHz band, also considered ideal for 4G, was set at Rs4,651 crore per unit, which is 20% less than the previously recommended minimum of Rs5,819 crore per unit.
The reserve price for the 2100 MHz band at Rs3,399 crore per unit was also slightly lower than Rs3,746 crore previously, although the base price for the 1800 MHz spectrum was set higher at Rs3,285 crore per unit compared to Rs2,873 crore a unit previously.
A substantial portion of Reliance Jio Infocomm’s own radio waves and those it shares with Reliance Communications in the 800 MHz band expire in 12 and 14 circles, respectively, as of July 2021.
In comparison, Bharti Airtel and Vodafone Idea, with more than 290 million and less than 280 million users each, will see less expensive radio waves, mainly in the 1,800 MHz band, they will expire in eight circles each, also from July 2021. But they both have backup radio waves in most of these service areas.
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