The country’s biggest ever spectrum auction will start on 29 September, 2016, in which the Department of Telecom (DoT) will put mobile phone airwaves worth Rs 5.63 lakh crore at the base price value for bidding. The DoT will hold a pre-bid meeting with companies on August 13, after which the final auction rules will be announced.
DoT has said that the government is giving a commitment of 30 days to assign spectrum from the day the payment is made, and has reduced the lock-in rules for diluting promoters’ equity from seven years to 1 year. It also said that large chunk of spectrum is being put for auction which address issue of fragmentation, improve quality of service and rules have been made bidder friendly.
For the forthcoming auctions, the spectrum usage charge (SUC) has been fixed at 3% or the minimum amount paid by operators during FY16 as floor. The operators will have the choice of both upfront and installments options. The service providers who win airwaves below 1 GHz bandwidth will have to pay 25% upfront, and those winning above that the upfront payment will be 50%. The remainder can be paid in equal annual instalments at a base rate of 9.3%, lower than the 10% fixed during the auctions held in 2015.
The department is putting on sale spectrum bands of 700MHz, 800MHz, 900MHz 1,800MHz, 2,100MHz, 2,300 MHz and 2,500 MHz. The 700 MHz band, which is the most expensive and most effective, is likely to generate less interest from telecom service providers. The total spectrum on the block also includes 197MHz of additional spectrum in the 1,800 MHz band and 37.5MHz in the 800 MHz band, released due to harmonization of spectrum in these bands.