New Delhi: India’s largest auction yet of seven spectrum bands will be completed by the end of September, newly appointed telecom minister Manoj Sinha said on Friday.
“We will try to complete spectrum auctions successfully by September," Sinha said, adding the government had no minimum target for the proceeds to be raised from the auctions.
“It all depends on the participation," he added.
Based on the base price, the spectrum is valued at ₹ 5.66 trillion. The auction will also, for the first time, offer the highly efficient but expensive 700 megahertz (MHz) band.
While the receipts from the auction will boost government coffers, the additional spectrum will expand the bandwidth and ability of telecom companies to service consumers and address the problem of call drops.
In the event of aggressive bidding, the balance sheets of telcos, already burdened by debt, will come under greater pressure.
A government official said telecom companies will bid aggressively for spectrum as Reliance Jio Infocomm Ltd, which is gearing up to roll out services in the next few months, will take the lead in the coming auctions.
“Reliance Jio, for example, has purchased spectrum from R-Com (Reliance Communications Ltd) which is only valid for the next five years, after which they might need spectrum. So, they will buy something. Probably 700 MHz or 1800 MHz," the official said, requesting anonymity.
“If one will buy, others will buy, too," the official said, adding that more spectrum will help telecom firms upgrade their quality of service.
On call drops, Sinha said the government expects an improvement in 4-5 months. Telecom firms, facing a potential crackdown, plan to invest a combined ₹ 12,000 crore in a 100-day action plan to improve their quality of service. “The matter will be taken up for discussions in the next 15-20 days," Sinha said.
Sinha said the ministry is consulting legal advisors on the demand notices it plans to slap on six telcos for allegedly under-reporting revenue to the tune of ₹ 46,000 crore.
The Department of Telecommunications plans to issue notices demanding about ₹ 12,500 crore to Bharti Airtel Ltd, Vodafone India Ltd, Aircel Ltd, Reliance Communications Ltd and Idea Cellular Ltd.
DoT issued a statement to that effect on Thursday after the Congress party accused the National Democratic Alliance (NDA) government of trying to protect the interests of the telcos.
Sinha called the allegation baseless, and said the government will recover “every penny" owed to it.
On Friday, finance minister Arun Jaitley noted in a Facebook post that the alleged under-reporting of revenue by the telecom companies happened during the term of the Congress-led United Progressive Alliance (UPA). “The pertinent question is, how is this a scam of the NDA government? The under-reporting by the telecom service providers relates to the period when the UPA was in power," Jaitley said.
“The final CAG (Comptroller and Auditor General) report pointed it out in February 2016 and only 3 weeks ago have the documents been sent by the CAG to the telecom department. Notwithstanding the fact that the issue is pending before the PAC (public accounts committee), the telecom department, which is processing these documents, will take action. What is act of omission and commission by the present government?" Jaitley asked.