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Business News/ Industry / Telecom/  Spectrum auction deferred by a week
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Spectrum auction deferred by a week

The last date for submission of applications to participate in the auction has now been shifted to 16 February, from the earlier 27 January

The auction, which is expected to raise as much as $10 billion for the exchequer, will be the fifth such sale of airwaves needed by telecom firms to offer wireless data and mobile services in the country. Photo: MintPremium
The auction, which is expected to raise as much as $10 billion for the exchequer, will be the fifth such sale of airwaves needed by telecom firms to offer wireless data and mobile services in the country. Photo: Mint

New Delhi: The much-awaited auction for telecom spectrum in the 2G and 3G bands has been deferred by a week, mainly on account of the cabinet delaying the approval of the minimum price for airwaves in the 2,100 megahertz (MHz) band.

The last date for submission of applications to participate in the auction has now been shifted to 16 February, from the earlier 27 January, according to an update from the department of telecommunications. The delay means the auction will only start on 4 March rather than the earlier 25 February after the national budget is presented in Parliament on 28 February.

The auction, which is expected to raise as much as $10 billion for the exchequer, will be the fifth such sale of airwaves needed by telecom firms to offer wireless data and mobile services in the country. The government is likely to get more than a quarter of this amount in this fiscal year itself as the winning bidders will have the option of paying 25-33% up front, depending on the band, and the remaining after a two-year moratorium in 10 annual instalments.

Earlier this month, the cabinet cleared the reserve price for spectrum in the 800MHz, 900MHz and 1,800MHz bands that will go on sale in the coming auction. The cabinet approved a base price of 3,646 crore per MHz for the 800MHz spectrum band, 3,980 crore per MHz for 900Mhz band airwaves, and 2,191 for the 1,800MHz band.

The telecom commission has cleared the reserve price for the 3G spectrum at 3,705 crore, 36% higher than the telecom regulator had recommended earlier. The decision is now waiting for the cabinet’s approval.

The cabinet is likely to clear the 3G spectrum base price later this week. In its earlier meeting, it approved the sale of 5MHz of 3G spectrum in the 2,100MHz band and also said that the armed forces had been convinced to swap the 3G spectrum they had, but did not approve the price.

Apart from a single block of 5MHz spectrum in the 3G band of 2,100MHz, the government will sell 103.75MHz in the 800MHz band, 177.8MHz (in 17 circles) in the 900 MHz band and 99.2MHz (in 15 circles) in the 1,800MHz band.

Most of the spectrum going on sale is already in use by the telecom operators. The telcos have it till November this year, when the 20-year lease for the airwaves expires. This means that much of the spectrum will see aggressive bidding by the operators to ensure they can continue their business in many of the circles where they operate.

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Published: 27 Jan 2015, 09:09 PM IST
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