Finalises reserve price, quantum of airwaves for auction; estimates earlings of Rs 63,694 crore; entire proceeds may not come this fiscal itself
The process of spectrum auction can now get underway with the Union Cabinet giving its final nod for reserve price, quantum, user charges and other issues for putting airwaves on the block.
The reserve price, which is the minimum price at which spectrum in a band can be awarded, has been fixed at Rs 3,695 crore per mega Hertz (MHz) for 900 MHz band, Rs 2,191 crore for 1800 MHz band and Rs 3646 crore for 800 MHz band.
Based on these prices, the estimated earnings of the government would be Rs 63,694 crore, of which Rs 16,000 crore would be realised in the current financial year. However, the exact earning would be based on the actual price at which the spectrum would be sold.
The quantum of spectrum, approved by the Cabinet, to be auctioned is all three bands is 184 MHz in 900, 100.2 in 1800 and 103.75 in 800. These will consolidated to be put for the auction in February this year.
It has also decided to club the auction of 2100 MHz with the other bands. However, it has yet to release the details of it. In this band, as per Department of Telecom (DoT) 15 MHz of spectrum is being vacated by Ministry of Defence (MoD), in lieu of spectrum in the 1900 MHz. This spectrum will not be made available immediately.
Rajan Mathew, director general of GSM operator's lobby body Cellular Operators Association of India (COAI), said he was displeased if the quantum of spectrum being released for auction in the 2100 MHz was 5MHz against the Telecom Regulatory Authority of India's (Trai) recommendation of 15 MHz.
An executive with a telecom company that operates in the 800 MHz band said the reserve price for airwaves in the 800 MHz band was inhibitive and would make it tough for his company to participate in the auction.
"This price (in 800 MHz band) is extremely high. This was precisely the reason why none of the players had participated in the first auction when it was held in 2012 and in 2013 only one player had taken part. At this price, I doubt whether any bidder would participate in it," he said.
Spectrum in 800 MHz band was first auctioned in 2012 but there was no response, leaving the government with unsold 95 MHz (paired). In the 2013 auction, there was lukewarm response with the government succeeding in selling only 30 MHz of the 95 MHz (paired) spectrum at Rs 3,639.48 crore against a pan-India reserve price of Rs 9,100 crore.
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