Govt sets base price of Rs3,705 crore for 2100MHz spectrum auction

New Delhi: Eyeing a record high spectrum sale of ₹ 1 trillion, the government on Wednesday fixed the base price for 3G auction at ₹ 3,705 crore per mega hertz—which itself can fetch over ₹ 17,000 crore from this band.

Along with the spectrum in 2,100 MHz band, which is used to offer 3G services, the government will also offer the second generation or 2G mobile airwaves in three different bands in an auction scheduled for 4 March.

While the auction of these 2G and 3G airwaves could garner ₹ 82,395 crore at the base or minimum price, sources said the government expects the total proceeds to exceed ₹ 1 trillion. The Union Cabinet, headed by Prime Minister Narendra Modi, on Wednesday approved the minimum or auction start price for airwaves in 2,100 Mega-Hertz band or 3G spectrum, which will garner at least ₹ 17,555 crore, telecom minister Ravi Shankar Prasad told reporters in New Delhi after the meeting.

Previously, it had approved reserve price for auction of 2G spectrum in 800 MHz, 900 Mhz and 1800 MHz bands that at the minimum rate set would get the government ₹ 64,840 crore. Of these, the government will get ₹ 16,000 crore from 2G spectrum sale and ₹ 5,793 crore on 3G airwaves this fiscal and the remainder will flow in later.

“This time the reserve price is ₹ 3,705 crore per MHz for 2100 Mhz. We have taken into account the market potential of this band,” he said. The Cabinet had approved a base price of ₹ 3,646 crore pan-India per MHz in 800 MHz, ₹ 3,980 crore for 900 MHz band pan India excluding Delhi, Mumbai, Kolkata and J&K and ₹ 2,191 crore pan India (excluding Maharashtra and West Bengal) in 1800 MHz band.

According to sources, the combined proceeds from auction of all the four bands are estimated by the government at over ₹ 1,00,000 crore—making it the biggest ever spectrum sale. Prasad said in 2010 auction of 3G airwaves, ₹ 700 crore per MHz was determined as the reserve price and in the auction, the government earned ₹ 3,350 crore per MHz, which was almost 8-times the price.