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4G spectrum auctions scheduled for March 1, NIA issued
The Department of Telecom has issued the Notice Inviting Applications for auction of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz & 2500 MHz bands.
Details of frequency bands
|Band||Type||Uplink frequency (MHz)||Downlink frequency (MHz)|
A single auction process will be carried out for assigning spectrum blocks in various bands viz. 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands. However, the government reserves the right to use any other means to assign the spectrum as it may deem fit without assigning any reason whatsoever.
The DoT has fixed January 12 for the pre-bid conference and January 28 as the last date for seeking clarifications on its notice. Telecom companies can apply till February 5. Final list of bidders will be announced n February 24, mock auction held on February 26, and auction kickstart on March 1, 2021.
MSTC has been selected to handle the auction.
The Telecom Regulatory Authority of India (Trai), in August 2018, came out with its recommendations on spectrum pricing, wherein the regulator reduced the base price of frequencies that went unsold in the 2016 auction.
The reserve price for the premium 700 MHz spectrum, which went unsold in 2016, was reduced by more than 40 per cent to Rs 6,568 crore per MHz all India from Rs 11,485 crore in 2016.
TRAI recommended a base price of Rs 4,651 crore for paired spectrum in the 800 MHz band covering 19 circles, Rs 1,622 crore per MHz for the 900 MHz band covering seven circles, Rs 3,399 crore per MHz in the 2,100 MHz band covering 21 circles and Rs 821 crore per MHz in the 2,500 MHz band covering 12 circles. It also suggested Rs 960 crore per MHz for unpaired spectrum in the 2,300 MHz band on a pan India basis.
In addition to the bid amount, successful bidders will also have to pay three per cent of the Adjusted Gross Revenue (AGR), excluding wireline services, as spectrum usage charges for the spectrum won through this auction.
Successful bidders may pay entire bid amount in one go (upfront). They can also exercise an option to pay a certain amount (25 per cent for spectrum won in 700 MHz, 800 MHz, 900 MHz bands or 50 per cent for spectrum won in 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands) upfront and the remaining amount in a maximum of up to 16 equated annual instalments after a moratorium of two years.
Bharti Airtel has 12.4 MHz of spectrum in 900 MHz band and 47 MHz in 1800 MHz band, and Reliance Communications’ 44 MHz of spectrum in 800 MHz band, being used by Reliance Jio, is coming up for renewal. Vodafone Idea needs to renew 6.2 MHz of spectrum in 900 MHz band and 38.2 MHz in 1800 MHz band.
The upcoming spectrum auction to be held in March may not see aggressive response from the industry and bids may be in the range of ₹30,000 crore to ₹50,000 crore for the radiowaves valued at around ₹3.92 lakh crore, according to analysts.
Market experts believe that telecom operators are likely to focus on renewal of spectrum and Vodafone Idea may not participate in the auction for renewal of their spectrum in some circles.
According to ICRA, it does not foresee any major participation in the 700 MHz band and pegged the bids to be in the range of ₹55,000-60,000 crore.
JM Financials, on the other hand, expects bids to be in the range of ₹30,000 crore only.
According to Credit Suisse, renewal of these spectrum frequencies will cost around ₹15,000 crore to Bharti Airtel and ₹11,500 crore to Reliance Jio.
In the past 10 years, the government has auctioned spectrum six times – in calendar years 2010, 2012, 2013, 2014, 2015 and 2016.
Also read , Notice Inviting Applications for spectrum auction on March 1, 2021, DoT
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