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Cabinet approves spectrum auction; to take place in March

After four years, the government is set to auction telecom spectrum, at a time when receipts from such auctions are much needed when tax and other sources of revenue are hit due to COVID-19.

December 17, 2020 / 11:20 AM IST

After four years, the government is set to auction telecom spectrum, at a time when receipts from such auctions are much needed when tax and other sources of revenue are hit due to COVID-19.

The Union Cabinet, on December 16, approved the auction of 2,251 megahertz of 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.

“This month itself we will issue notices inviting applications, and the auction will be carried out in March,” Prasad said.

In the Union Budget 2020-21, the government had targeted a revenue of Rs 1.33 lakh crore from telecommunication services, which includes spectrum auction proceeds, licensing fees and other receipts. In 2019-20, the centre received Rs 58,990 crore in telecommunication revenues, versus a budgeted target of Rs 50,520.

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“Spectrum will be offered for assignment for validity period of 20 years. A total of 2251.25 mhz is being offered with 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 including block size in which bidders will be able to submit their bids, the maximum amount of spectrum that can be held by each bidder after the completion of the auction, roll-out obligations, payment terms, etc,

It said that successful bidders may pay entire the bid amount upfront or may exercise an option to pay a certain amount upfront and remaining amount in a maximum up to 16 equated annual instalments, after a moratorium of two years.

In the latter case, 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 has to be paid in one go.

“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,” it said.
Arup Roychoudhury
first published: Dec 16, 2020 03:48 pm
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