In order to make the biggest-ever telecom spectrum auction starting from October 1, smooth and glitches free, the government kick-started mock auction among the seven qualified bidders. As per the Department of Telecommunications the mock auction started from Monday morning -September 26 and will go on till September 27. The mjunction services limited is advising the government on this auction and also conducting the mock auction.
In some new bidding-friendly measure adopted by the government this year is that spectrum won will be assigned within 30 days from date of upfront payment, while Interest on deferred payment, linked to base rate, will be 9.3 per cent this year against 10 per cent in 2015. Also, for the successful bidder, the lock-in period of equity in the company has been reduced to 1 year instead of the earlier stipulation of minimum period of 3 years or completion of roll out obligation whichever is later.
The total amount of spectrum to be offered for sale is 2,354.55 megahertz (MHz). Overall, based on the reserve price, the mop up is expected to be Rs 5.66 lakh crore. The 2,300-plus MHz of airwaves on the block for telecom operators is in seven bands -- 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz -- as against 470.75 MHz in the previous round, which is set to fetch the exchequer $17 billion during its tenure. The companies qualified for auction are Bharti Airtel, Vodafone India, Reliance Jio Infocomm, Reliance Communications, Idea Cellular, Aircel and Tata Teleservices and the government has decided to allot the right to the spectrum won through auction for 20 years.
The operators will have the choice of both upfront and installments payment options. The service providers who win airwaves below 1 gigahertz (GHz) bandwidth will have to pay 25% upfront and who winning above that have to pay 50%. As the government has adopted on new bidding-friendly measure this year, interest on deferred payment, linked to base rate will be 9.3% this year instead of 10% in 2015.
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