New Delhi: The Union Cabinet approved Wednesday a proposal for the auction of 2,251.25 megahertz of spectrum worth Rs 3.92 lakh crore at base price. The Telecom Ministry plans to issue a notice to invite bids in December. The spectrum auctions will be held by March, Telecom Minister Ravi Shankar Prasad said.
The government, however, has decided not to auction frequencies in 3,300-3,600 Mhz bands that were identified for 5G services.
“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 a validity period of 20 years. A total of 2,251.25 MHz is being offered with a total valuation of Rs 3,92,332.70 crore (at reserve price),” an official ministry statement said.
“The notice inviting application shall be issued in this month and by auction will be conducted by March,” Prasad told reporters after the Cabinet meeting.
The Digital Communications Commission is the apex decision making body of the Department of Telecom. In May it had approved the spectrum auction plan worth Rs 5.22 lakh crore which included radiowaves for 5G services as well.
However, a part of the 300 Mhz of spectrum identified by the DoT for 5G services is being used by the Navy, and the Department of Space has also made claims on a significant portion of these radiowaves.
The industry has also been demanding the government to lower the base price of 5G spectrum as each operator will need to shell out around Rs 50,000 crore for the required quantum of radiowaves for the next generation services. Prasad did not reply to questions on the status of 5G spectrum.
The minister said that the government has retained rules of 2016 for payments in the upcoming auction as well. Besides the bid price, the telecom operator will also need to pay a three per cent revenue share to the government every year.
“In addition to the bid amount, successful bidders will also have to pay 3 per cent of the adjusted Gross Revenue (AGR) excluding wireline services as spectrum usage charges for the spectrum won through this auction,” the statement said.
“Successful bidders may pay entire bid amount in one go (upfront) or may exercise an option to pay a certain amount (25 per cent for spectrum won in 700 MHz, 800 MHz, 900 MHz bands or 50 per cent 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 installments, after a moratorium of two years,” the statement informed.