Cabinet approves next round of spectrum auction to be held in March
By TIOL News Service
NEW DELHI, DEC 16, 2020: THE Cabinet approved the next round of spectrum auction for frequencies of 2,251 megahertz (MHz) and valued at Rs 3.92 lakh crore to be sold to commercial mobile services.
The auction will be for spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz frequency bands, for validity period of 20 years.
"By winning the right to use spectrum through the auction, incumbent telecom service providers will be able to augment their network capacity whereas new players will be able to start their services," an official release from the Ministry of Communications said.
Telecom and IT Minister Mr Ravi Shankar Prasad said the government will not put on sale spectrum frequencies that have been identified for 5G services.
The conditions for the auction will remain the same as in 2016, when the last auction took place.
Bidders will have to comply with parameters such as block size, roll-out obligations, payment terms and the spectrum cap, which is the maximum amount of spectrum that can be held by each bidder after the completion of the auction.
Successful bidders may pay entire bid amount upfront or may exercise an option to pay a certain amount - 25% for spectrum won in 700 MHz, 800 MHz, 900 MHz bands; 50% for spectrum won in 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands upfront, and the remaining amount in up to 16 equated 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 for the spectrum won through this auction.
The notice inviting applications for the auction will be issued in December and the auction will be conducted in March 2021.