Centre sets ball rolling on mega spectrum bid
New Delhi: The biggest spectrum auction expected to bring in Rs 5.63 lakh crore kicked-off on Monday with government releasing Notice Inviting Application (NIA).
The auction will start from September 29. “With auction size of this magnitude and bidder friendly rule there is going to be immense interest from bidders. The amount of spectrum being put to auction is more than any previous auction. It will give them opportunity to bid and acquire chunk of spectrum which would enable to them to provide international quality services,” said telecom secretary Mr J.S. Deepak.
Interested bidders will have to submit application for participating in auction by September 13. The telecom department will hold pre-bid conference with telecom operators on clarification over NIA on August 13.
The department will issue clarification on August 29, and then will give 15 days time to companies for submitting their application. Government has relaxed equity lock-in period. This will free company, whose networth has been used to procure spectrum, to exit from the company in 1 year as against 5 years prescribed earlier.
“The roll out obligation will be considered complete if the district headquarters and block headquarters are covered by use of any technology in any band. In the sense that if a district headquarter is covered through one technology it does not have to be done by other technology,” Mr Deepak said.
The successful bidders will have to pay 3 per cent of their revenues from telecom services as spectrum usage charges (SUC) to government. The government will put a total of 2,354.55 megahertz of mobile airwaves frequencies for auction in all bands — 700 Mhz, 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz and 2300 Mhz.
All the airwaves being put for auction can be used for high speed 4G services.
The total quantum of spectrum being put for auction includes about 197 Mhz of frequencies in 1800 Mhz band and 37.5 Mhz in 800 Mhz band (CDMA band).
The existing or incumbent telecom operators winning spectrum in the upcoming auction will need to pay SUC according to weighted average method calculated taking in account current levy applicable on them and three per cent on fresh airwaves.
The new participants in the auction will have to provide Performance Bank Guarantee (PBG) of Rs 35 crore per telecom circle for bidding in 700 MHz, 800 MHz, 900 MHz and 1800 MHz. Existing players will need to provide PBG of Rs 21 crore per circle.