New Delhi: The Department of Telecommunications (DoT) expects to start the next spectrum auction by 3 February 2015 and rake in around 14,000 crore by selling spectrum in 800MHz, 900MHz, 1,800MHz and 2,100MHz bands.

“In the budget estimates for financial year 2014-15, a projection of total of 9,355 crore has been made in respect of revenue receipts from auctions in the bands of 800MHz, 900MHz and 1,800MHz. Further, it has been indicated to the ministry of finance that receipts may be increased by 5,000 crore on account of 3G spectrum auction, which may be possible subject to release of spectrum held by defence," according to an internal memo of the DoT, reviewed by Mint.

According to the note, DoT will start the process of auctioning the spectrum by first issuing a request for proposal (RFP) for an auctioneer, on 14 August. This is expected to be finalized by 17 October after which a notice inviting applications (NIA) will be issued on 1 December.

The NIA is a legally binding document which contains the rules and regulations that will govern the auction. After the publication of NIA, DoT will hold a pre-bid conference and issue clarifications for potential bidders, following which the auction will begin.

The government has set a revenue target of 45,471 crore from communication services, including spectrum auctions as well as other charges that telcos pay to operate in the country. The receipts under the same head were 40,847.06 crore in 2013-14, according to revised budget estimates.

Much of the spectrum to go on sale this time around will be from the 900MHz band that is currently held by incumbent operators in the non-metro circle. Telcos are nearing the expiry date of these frequencies and hence the airwaves are going up for auction. The government is also looking to auction 800MHz spectrum that has so far been used by the CDMA- based telcos.

In the last few years, the government has held three auctions for airwaves, but only the last of them is considered a success. The government garnered bids worth more than 60,000 crore in the February auction, of which more than 18,000 crore would go to the exchequer this fiscal as part of a staggered payment plan. The earnings were more than 60% higher than the expected figure of around 11,000 crore.

The government expects to sell all the spectrum available this time around, as telcos prepare for a huge wireless data demand expected in the country, as well as replace the spectrum they stand to lose due to expiring licences.

“Licences of several players are up for renewal in the short term. Following other countries as benchmarks, government should make available significant amount of spectrum across all the bands, so that all players have the choice and incentive to take part in the auctions. Detailed plan and timeline of the auction should be shared well in advance to help operators make optimum business decisions. Also it would be prudent to decide on the digital dividend now and make judicious use of it," Hemant Joshi, Partner, Deloitte Haskins and Sells, said on Friday.

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