Spectrum auction to begin on September 29: TRAI


21 Jun 2013
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India’s next round of spectrum auction is set to begin on September 29, Telecom Secretary J.S. Deepak announced in what the government hopes will be the largest ever spectrum auction — going by the overall base price of $84 billion and the quantum of airwaves on offer. The Department of Telecommunications (DoT) released the Notice Inviting Application (NIA) for the auction on Monday. “The spectrum auction will start on Sep 29 and the total amount of spectrum that will be offered is 2,354.55 MHz,” Deepak said. “This include the airwaves recommended by Telecom Regulatory Authority of India (TRAI) as well as the spectrum that became available through harmonization process,” he added.

The 2,300-plus MHz of airwaves on the block for telecom operators is in seven bands — 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz — as against 470.75 MHz in the previous round, which is set to fetch the exchequer $17 billion during its tenure. The Secretary said government has harmonized 197 MHz of spectrum in 1,800 MHz band and 37.5 MHz in the 800 MHz band. “The government is offering additional 234.5 MHz airwaves for auction in these two bands at a reserved price of Rs 27,000 crore.” Overall, based on the reserve price, the mop up is expected to be Rs 5.66 lakh crore.

Deepak said operators will have the choice of both upfront and installments options. The service providers who win airwaves below 1 GHz bandwidth will have to pay 25 percent upfront, and those winning above that the upfront payment will be 50 percent. “One new bidding-friendly measure the government has adopted this year is: Spectrum won will be assigned within 30 days from the date of upfront payment. Interest on deferred payment, linked to base rate, will be 9.3 percent this year against 10 percent in 2015.

In a meeting of the cabinet in June, chaired by Prime Minister Narendra Modi, an official nod was given for the reserve price and the auction norms. This was followed by a similar nod last week for spectrum usage charge at 3 percent of a telecom company’s adjusted revenues. A highlight of the auction will be the auction of the 700 MHz band for the first time — touted as the most efficient airwave range for data services — but also with doubts over adequate takers due to the high base fixed by the government. The industry watchdog, had suggested Rs 1,595 crore per MHz base for this band, which translates into a reserve price of Rs 11,485 per MHz for a pan-India footprint.

Spectrum auction to begin on September 29: TRAI
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