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Photo: Indranil Bhoumik/Mint
Photo: Indranil Bhoumik/Mint

Government to hold spectrum auction on 1 March; invites applications

  • Govt will carry out single auction to assign spectrum blocks in the 700MHz (megahertz), 800MHz, 900MHz, 1,800MHz, 2,100MHz, 2,300MHz and 2,500MHz bands.

The government will conduct auction for radiowaves worth 3.92 lakh crore on 1 March, the department of telecommunications (DoT) said in a notice on Wednesday. It will carry out single auction to assign spectrum blocks in the 700MHz (megahertz), 800MHz, 900MHz, 1,800MHz, 2,100MHz, 2,300MHz and 2,500MHz bands, the notice said.

The telecom department also invited applications from prospective eligible bidders to participate in the upcoming auction. It said it will pre-qualify applicants who meet the eligibility criteria for the sale of the radio airwaves.

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“The government reserves the right to summarily disqualify any pre-qualified bidder at any stage of the auction or after the auction are completed on the grounds of non-compliance with eligibility conditions, misrepresentation, non-compliance with the relevant auction rules, or any matter that may, in the opinion of the government, be contrary to general public interest," the notice said.

Through the auction, the government aims to obtain a “market-determined price" of spectrum bands put up for sale in a transparent manner. It wants to ensure efficient use of spectrum and avoid hoarding. The auction will also stimulate competition in the telecom sector, it said.

The government also wants to maximise revenue proceeds from the auction. However, experts feel that it may not achieve this objective as two of the three largest telcos in the country have expressed disinterest in the next auction due to high reserve prices.

In December, the Union cabinet approved the modalities of the next spectrum auction, excluding the 3,300-3,400MHz bands that were recommended by the Telecom Regulatory Authority of India (Trai) for 5G (fifth-generation) wireless service.

According to the official statement, buyers can either pay the entire bid amount upfront or may shell out 25% for spectrum in the 700MHz, 800MHz and 900MHz bands, and 50% for airwaves bought in the 1800MHz, 2100MHz, 2300MHz and 2500MHz bands initially. The remaining amount can be paid in a maximum of up to 16 annual instalments, after a moratorium of two years.

“In addition to the bid amount, successful bidders will also have to pay 3% of the adjusted gross revenue (AGR), excluding wireline services as spectrum usage charges (SUC) for the spectrum won through this auction," the statement said.

Analysts fear the next round of spectrum auction could be a repeat of the October 2016 fiasco when large chunks of airwaves remained unsold due to high reserve prices. Over four years ago, the government had raised just 65,789 crore through spectrum auction, a fraction of the 5.63 trillion worth of airwaves put up for sale. Spectrum in the 700MHz and 900MHz bands were completely unsold in 2016.

On Wednesday, the government said the last day for submission of applications is 5 February. The DoT will notify the venue and date/time of a pre-bid meeting separately on its website.

MSTC Ltd has been appointed as the government’s advisor for this auction. “Administration of the e-auction shall also be the responsibility of MSTC," the notice said.

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