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4G Auction: Telecom minister Ravi Shankar Prasad says Govt will sell 2251.25 MHz spectrum for over Rs 3.92 lakh crore

The Department of Telecom will issue Notice Inviting Applications (NIA) from telecom companies for auction process within this month.

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Telecom minister Ravi Shankar Prasad. (Photo: ANI)
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In a major development for the telecom sector, the Cabinet accepted the telecom department’s proposal on the next spectrum auctions at its meeting on Wednesday (December 16), which would include a sale of only 4G airwaves and will be held in March 2021.

Telecom and IT minister Ravi Shankar Prasad said that the government will auction a total of 2251.25 MHz spectrum in 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300 MHz and 2500 MHz bands. 2251.25 MHz will be offered with total valuation of Rs. 3,92,332.70 crore (at reserve price).

The Department of Telecom will issue Notice Inviting Applications (NIA) from telecom companies for auction process within this month. India’s telecom sector, in the efforts of enabling policies including more quantum of the spectrum, is set to establish new benchmarks in the next-generation network deployments and service delivery.

“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 government read.

Successful bidders may pay entire bid amount in one go (upfront) or may exercise an option to pay a certain amount (25% for spectrum won in 700 MHz, 800 MHz, 900 MHz bands or 50% for spectrum won in 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands) upfront and remaining amount in a maximum 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.

“In the auction, bidders will have to comply with parameters/conditions e.g. block size in which bidders will be able to submit their bids, spectrum cap i.e. the maximum amount of spectrum that can be held by each bidder after the completion of the auction, roll-out obligations, payment terms etc,” the statement added.

Trai had lowered the prices of most bands from those set at the previous sale in October 2016. For 700 MHz, which was unsold at the previous auction, the authority proposed cutting the base price by 43% to Rs6,568 crore a unit, or Rs32,840 crore for a block of 5 MHz.

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