The Union Cabinet on Thursday approved guidelines for the next spectrum auction round that may start the last week of January, Union Minister Prakash Javadekar said.
“Cabinet approves auction of spectrum in frequency bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz, for a period of 20 years. A total of 2251.25 MHz is offered with a total valuation of 3.92,332.70 crore, said Telecommunications Minister Ravi Shankar Prasad.
Prasad also said: “It has been 4 years since the last auction, the conditions for the auction are the same as in 2016.” This means that notification of invitation requests will start this month. “We propose to hold the auction in March 2021,” he added.
India’s IT minister said telecom providers with a mandate to use new devices designated as trusted products and that a national security panel on telecommunications will be formed.
By obtaining the right to use spectrum through the auction, established telecommunications service providers will be able to increase their network capacity, while new players will be able to start their services.
In the auction, the bidders will have to comply with the parameters / conditions, for example, the size of the block in which the bidders will be able to present their bids, spectrum limit, that is, the maximum amount of spectrum that each bidder can have after the completion of the auction, roll-of obligations, payment terms, etc., added the Cabinet.
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.
The Telecommunications Regulatory Authority of India (Trai) had recommended a plan to auction spectrum by value ₹Rs 5.22 million lakh. However, some of the spectrum frequencies identified by the DoT for auction are being used by the Ministry of Defense and the Department of Space.
The Department of Telecommunications (DoT) has identified 300 megahertz (Mhz) of spectrum blocks for 5G services. However, the Ministry of Defense and the Department of Space (DoS) have claimed about 125 MHz of spectrum, leaving only 175 MHz of radio waves for telecommunications companies.
Trai recommended the base price of the proposed 5G spectrum in the 3,300-3,600 Mhz band at approximately ₹492 crore per Mhz of unpaired spectrum across India. This comes around ₹50,000 crore per 100 Mhz of 5G spectrum needed to offer 5G services.
The DoT has selected the public sector company MSTC to design and develop spectrum auction software. However, due to claims from the DoS and the Defense Ministry, the auction process was delayed.
The spectrum auction is a transparent process for assigning spectrum to selected bidders. The availability of sufficient spectrum increases the quality of telecommunications services for consumers.
It is relevant that the telecommunications sector is today a key infrastructure provider with strong links to economic growth, direct and indirect employment generation and the expansion of Digital India. Therefore, the previous Cabinet decision is expected to have a healthy impact in all respects.
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