The Cabinet on Monday approved second generation (2G) spectrum auction in the 800 MHz, 900 MHz and 1800 MHz bands at a reserve price set by the Telecom Commission.
The auction, which will take place next month, is expected to fetch nearly ₹64,800 crore to the exchequer. The previous auction that took place in February 2014 had earned the Centre close to ₹62,162 crore. The Cabinet also expressed its intent to sell spectrum in the 2100 MHz band (3G) — after Defence Ministry vacates it — simultaneously, but details of this will be announced later.
The reserve price approved per MHz pan-India is: ₹3,646 crore in 800 MHz band; ₹3,980 crore for 900 MHz (excluding Delhi, Mumbai, Kolkata, and Jammu and Kashmir); and ₹2,191 crore in 1800 MHz band (excluding Maharashtra and West Bengal), an official statement said.
A total of 380.75 MHz in 800, 900 and 1800 MHz is being put to auction. Sources in the Telecom Ministry said that the notice inviting applications will be put out this week.
The last date for submission of application is February 2 and the bidders will be pre-qualified by February 13. The auction will start on February 23.
Speaking to BusinessLine , Ravi Shankar Prasad, Minister for Communications and Information Technology, said: “This would prohibit hoarding and ultimately create services for all … what needs to be appreciated is that an issue which has been pending for long has been cleared.”
If all the spectrum on sale is bought at reserve price, then the Centre will get ₹16,000 crore in the current financial year.
According to an official statement, the objective of the auction is to obtain a market-determined price of spectrum in various bands through a transparent process, ensure efficient use of spectrum, stimulate competition in the sector, promote rollout of the respective services, and maximise revenue.
The Centre has said that successful bidders will be given two options to make the payment. They can make a full upfront payment within 10 days of declaration of final price or make a deferred payment. The deferred payment will be subject to conditions — an upfront payment of 33 per cent in the case of 1800 MHz band and 25 per cent in the case of 900 MHz and 800 MHz, of the final bid amount within 10 days of declaration of successful bidders and final price.
There will be a two-year moratorium for payment of balance amount of one-time charges for the spectrum, which shall be recovered in 10 equal annual instalments.