Spectrum Sale May Generate Only Rs 10,000 Crore Initial Payment

The government may generate an initial payment only Rs 10,000 crore from spectrum auction, according to a report by The ET.

This indicates that the next spectrum sale could generate only around Rs 35,000-40,000 crore, as against the Rs 5.86 lakh crore worth of airwaves the government intends to sell at a base price, experts told the paper.

Successful bidders usually pay an upfront amount of 25 percent for sub-1 GHz spectrum, and 50 percent upfront for higher frequency bands. The remainder is paid over 16 years in annual instalments.

Loss-making telecom players Vodafone Idea and Bharti Airtel will likely not participate in the 5G spectrum auction planned in March or April, officials told The Economic Times.

Airtel is expected to purchase some 4G airwaves, particularly in circles where its permits are expiring, the report said.

“Of the three players, Jio may take some 5G spectrum but not much, besides some 4G. We expect it will do so to get the first mover advantage,” an official told the publication.

The government will receive Rs 20,000-25,000 crore from licence fees and spectrum usage charge, below the Rs 1.33 lakh crore budgeted for FY21. Without the adjusted gross revenue (AGR) dues, the government will be unable to meet its target, the report said.―Money Control