Cabinet approves auction of spectrum for mobile services
New Delhi, December 16, 2020
The Union Cabinet today approved a proposal of the Department of Telecommunications to conduct spectrum auction for providing commercial mobile 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 the assignment for a validity period of 20 years, an official press release said.
A total of 2251.25 MHz is being offered with a total valuation of Rs. 3,92,332.70 crore (at reserve price), it said.
By winning the right to use spectrum through the auction, incumbent telecom service providers will be able to augment their network capacity whereas new players will be able to start their services.
In the auction, bidders will have to comply with the parameters/ conditions, such as the block size in which bidders will be able to submit their bids, spectrum cap, that is the maximum amount of spectrum that can be held by each bidder after the completion of the auction, roll-out obligations, payment terms, and so on.
Successful bidders may pay the entire bid amount in one go (upfront) or may exercise an option to pay a certain amount (25% for spectrum won in 700 MHz, 800 MHz, 900 MHz bands or 50% for spectrum won in 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands) upfront and the remaining amount in a maximum up to 16 equated annual instalments, after a moratorium of two years.
In addition to the bid amount, successful bidders will also have to pay 3% of the Adjusted Gross Revenue (AGR) excluding wireline services as spectrum usage charges for the spectrum won through this auction.
"The auction is a transparent process of spectrum assignment to successful bidders. Sufficient spectrum availability increases the quality of telecom services for consumers," the release added.