In a major development, the Union Cabinet has approved the auction of 2,251 megahertz of the spectrum by the end of FY2020-21, Telecom Minister Ravi Shankar Prasad said.
“In total 2,251 MHz will be put for auction. We will be auctioning spectrum in the 700, 800, 900, 1800, 2100, 2300, and 2500 MHz bands,” Prasad said at a media briefing.
The notice inviting applications will commence this month since conditions for the auction is expected to be the same as 2016, he said. “We propose to hold auction by March 2021,” he added.
The government gave successful bidders the option of either paying the entire bid amount upfront or exercising an option to pay a certain amount upfront and the remaining amount in a maximum up to 16 equated annual installments, after a moratorium of two years.
In the latter case, 25 percent for spectrum won in 700 MHz, 800 MHz, 900 MHz bands or 50 percent for spectrum won in 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands has to be paid in one go.
“In addition to the bid amount, successful bidders will also have to pay 3 percent of the Adjusted Gross Revenue (AGR) excluding wireline services as spectrum usage charges for the spectrum won through this auction,” an official statement said.
The government had targeted a revenue of Rs 1.33 lakh crore from telecommunication services in the 2020-21 Union Budget. The target includes spectrum auction proceeds, licensing fees, and other receipts.
Last year, the center had mopped up Rs 58,990 crore in telecommunication revenues against a budgetary target of Rs 50,520.
“Spectrum will be offered for an assignment for a validity period of 20 years. A total of 2251.25 MHz is being offered with a total valuation of Rs. 3.92 lakh crore (at reserve price),” said an official statement.
The statement said that bidders will have to comply with parameters of block size and holding of the maximum amount of spectrum by each bidder after the completion of the auction, roll-out obligations, and payment terms among others.