Spectrum Auctions from March 1

The Department of Telecommunications (DoT) has invited applications from companies willing to participate in the upcoming 4G spectrum auctions. The spectrum auctions will be starting from March 1 and all the companies willing to participate in the auction have to submit their applications before the last date i.e. February 5.

Key Points

  • The spectrum auctions will be done in the 2500 MHz, 2300 MHz, 2100 MHz, 1800 MHz, 900 MHz, 800 MHz, and 700 MHz bands.
  • After the completion of auctions on March 1, all the successful bidders will be required to pay the amount within 10 days.
  • MSTC Limited, a Kolkata-based state-owned e-commerce company, is advising the Department of Telecommunications on the auction. MSTC Ltd. will also be the auctioneer.
  • In December, the government cleared the sale of 2251.25 MHz of spectrum across seven frequency bands at a reserve price of Rs 3.92 lakh crore.
  • The spectrum will be allocated for 20 years and is expected to provide a boost to government revenue collections.
  • Telecom service providers (TSPs) and other successful bidders can pay the entire bid amount upfront, or choose to pay a certain amount and the remaining in 16 equated annual installments after a moratorium of 2 years.
  • As per the payment plan, bidders for the sub-1 GHz bands of 900 MHz, 800 MHz, and 700 MHz can pay 25 percent of the bid amount at the time of auction and the rest later.
  • For above-1 GHz bands of 2500 MHz, 2300 MHz, 2100 MHz, and 1800 MHz frequency bands, bidders can pay 50 percent upfront, and choose to pay the rest in equated annual installments.
  • The successful bidders will also have to pay adjusted gross revenue (AGR) of 3 percent as spectrum usage charges, excluding wireline services.

The last such spectrum auctions were held in the year 2016. In that spectrum auction, the government offered 2,354.55 MHz at a reserve price of Rs 5.60 lakh crore. However, the government was able to sell only 40% of the spectrum that was put up for sale i.e. 965 MHz. The total value of bids received during the spectrum auction was Rs 65,789 crore.