New Delhi: Companies looking to participate in the auction of spectrum in the 1800 megahertz (MHz), 900MHz and 800MHz bands have till 22 February to submit their applications, according to the notice inviting applications for the sale, released on Wednesday by the Department of Telecommunications.
The government expects to raise at least Rs.40,000 crore from an auction of telecom spectrum in March, according to department of telecommunications secretary R. Chandrashekhar. A November auction that targeted to raise a similar amount managed to raise less than a fourth of the intended sum.
The auction will start on 11 March, initially for spectrum in the 900MHz and 1800MHz bands, Mint reported on 24 January. The 800MHz spectrum auction will start two days after the 1800MHz and 900MHz auction concludes.
“The award of spectrum in 1800MHz and 900MHz band shall be conducted as a single process while the award of spectrum in 800MHz band shall be conducted as separate and distinct process,” the notice said.
The government is looking to auction 12 slots of 1.25 MHz each in the 1800MHz spectrum band in Delhi, Mumbai, Karnataka and Rajasthan. The Cabinet had, earlier this month, cleared a proposal of the empowered group of ministers to cut the minimum price of the spectrum in these circles by 30%.
Similarly, spectrum in the 900MHz band will be auctioned for Delhi, Mumbai and Kolkata. This spectrum will only become available for use once the operators that are currently using it vacate it in November 2014. The 20-year permit to use the 900MHz spectrum given to Bharti Airtel Ltd, Vodafone and Idea will expire in November 2014. They can, however, bid for the spectrum in order to continue using it. The spectrum is considered better than 1800MHz spectrum because operators need to erect fewer towers and other infrastructure to offer 2G telecom services. Companies that win the spectrum will also be able to offer 4G services using the airwaves.
Two days after the 1800MHz and 900MHz spectrum auction concludes, the government will auction at least three slots of 1.25MHz each of the 800MHz band, also referred to as CDMA spectrum. This was supposed to take place in November after the 1800MHz band auction but had to be cancelled because of a lack of interest. The Cabinet has approved a 50% cut in the reserve price of the spectrum, but analysts believe this is unlikely to make much of a difference. In the two circles of Punjab and Andhra Pradesh, only two blocks will be up for auction. No 800MHz spectrum is being auctioned in Rajasthan.
The winning bidders will be allowed to pay for the spectrum by way of a full upfront payment, or a deferred option. The latter would mean an upfront payment of 33% in the case of the 1800MHz band, and 25% in case of the 900MHz and 800MHz bands of the final bid amount. The remainder would be in equal yearly instalments for the duration of the allowed period.