India's Biggest Telecom Spectrum Auction Deferred by Two Days

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India's Biggest Telecom Spectrum Auction Deferred by Two Days
Highlights
  • Mock auction dates on September 26 and 27
  • Total amount of spectrum that will be offered for sale is 2,354.55MHz
  • The mop up is expected to be Rs. 5.66 lakh crore

India's biggest-ever telecom spectrum auction has been deferred by two days, to October 1 from September 29, the Department of Telecommunications (DoT) said in a revised Notice Inviting Application (NIA) for the auction in New Delhi on Monday.

While the NIA gave no reasons for the change, it is learnt that two reasons prompted the change in the date. First the telecom operators have requested the government that the auction should start from an auspicious date (and not from the inauspicious Shradhh period) and secondly they also said there should be a gap of at least three working days between mock auction and actual auction.

(Also see: Tech 101: What Is Spectrum, and Why Is It Being Auctioned?)

The revised timetable of the auction has put the mock auction dates on September 26 and 27 and the start of actual auction from October 1.

The total amount of spectrum that will be offered for sale is 2354.55MHz. Overall, based on the reserve price, the mop up is expected to be Rs. 5.66 lakh crores.

The 2,300-plus MHz of airwaves on the block for telecom operators is in seven bands - 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz and 2500MHz - as against 470.75MHz in the previous round, which is set to fetch the exchequer $17 billion (roughly Rs. 114,027 crores) during its tenure.

(Also see: The History of Telecom Spectrum in India: The 900MHz Auctions)

mjunction services limited is advising the government on this auction.

The government has decided to allot the right to the spectrum won through auction for 20 years.

The operators will have the choice of both upfront and installments payment options. The service providers who win airwaves below 1GHz bandwidth will have to pay 25 percent upfront, and those winning above that the upfront payment will be 50 percent.

One new bidding-friendly measure the government has adopted this year is that spectrum won will be assigned within 30 days from the date of upfront payment. Interest on deferred payment, linked to base rate, will be 9.3 percent this year against 10 percent in 2015.

For the successful bidder, the lock-in period of equity in the company has been reduced to one year instead of earlier stipulation of minimum period of three years or completion of roll out obligation, whichever is later.

In a meeting of the cabinet in June, chaired by Prime Minister Narendra Modi, an official nod was given for the reserve price and the auction norms.

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