As we shared earlier today, the DoT has released the Notice Inviting Applications (NIA), the legally-binding document for the spectrum auctions, outlining full details of how the government plans to sell airwaves to private telecom operators, including the eligibility requirements and the minimum earnest money which operators will have to deposit if they wish to participate in the auctions.
The focus of this article is to give an in-depth view and analysis of the NIA in a concise manner for the benefit of our readers who might find it tedious to go through the entire length of the 167 page document. I have tried to highlight all the important aspects, the main one being the availability of spectrum in each band in each telecom circle.
Let us start with an overview of the auction 2016 timetable given in the table below.
Auction timetable | ||
Issue of Notice Inviting Applications (NIA) | 8th Aug | T=0 |
Pre-bid Conference | By 13th Aug | T+5 |
Last date for seeking clarifications on NIA | 19th Aug | T+11 |
Clarifications to NIA | 29th Aug | T+21 |
Last date for submission of Applications | 14th Sept | T+36 |
Publication of Ownership details of Applicants | 15th Sept | T+37 |
Bidder Ownership Compliance Certificate | 16th Sept | T+39 |
Pre-qualification of Bidders | 19th Sept | T+42 |
Last date of withdrawal of applications | 22nd Sept | T+45 |
Final List of bidders | 23rd Sept | T+46 |
Mock Auction | 26th & 27th Sept | T+49 |
Start of the Auction | 1st Oct | T+52 |
Payment of the Successful Bid Amount | Within 10 calendar days of the issue of demand note | |
Venue and Date/ time of Pre Bid meeting will be notified on DoT website separately |
The mega spectrum auction is designed to put on sale a total of 2354.55 MHz of spectrum ranging across the 7 bands of 700 MHz, 850 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz. Let us consider the circle wise availability of spectrum in each of these bands in the upcoming auction.
700 MHz:
This is the first time that spectrum in this band is being auctioned in India. This corresponds to Band 28 and is useful for 4G FD-LTE deployment. The good indoor coverage offered by the better penetrative power of these airwaves is what makes it the most sought after band, but the lack of a mature device ecosystem coupled with high reserve price may lead to limited interest by the operators. The DoT has put up 35 MHz of paired spectrum in this band for sale in each of the 22 circles as 7 blocks of 5 MHz each. The details are given in the table below.
700 MHz Band | ||||||
Block Size:5MHz (paired) | ||||||
Name of Telecom Circle / Metro LSA | Quantum on sale (MHz) (paired) | No of Blocks | Reserve Price per MHz (Rs Cr) | Reserve Price per Block (Rs Cr) | EMD/ Block (Rs Cr) | Eligibility Points/ Block |
Andhra Pradesh | 35 | 7 | 971 | 4855 | 480 | 3105 |
Assam | 35 | 7 | 158 | 790 | 60 | 291 |
Bihar | 35 | 7 | 248 | 1240 | 120 | 641 |
Delhi | 35 | 7 | 1595 | 7975 | 480 | 3105 |
Gujarat | 35 | 7 | 952 | 4760 | 480 | 3105 |
Haryana | 35 | 7 | 186 | 930 | 120 | 641 |
Himachal Pradesh | 35 | 7 | 64 | 320 | 30 | 132 |
Jammu & Kashmir | 35 | 7 | 52 | 260 | 30 | 132 |
Karnataka | 35 | 7 | 740 | 3700 | 480 | 3105 |
Kerala | 35 | 7 | 334 | 1670 | 240 | 1411 |
Kolkata | 35 | 7 | 596 | 2980 | 240 | 1411 |
Madhya Pradesh | 35 | 7 | 331 | 1655 | 240 | 1411 |
Maharashtra | 35 | 7 | 1272 | 6360 | 480 | 3105 |
Mumbai | 35 | 7 | 1192 | 5960 | 480 | 3105 |
North East | 35 | 7 | 44 | 220 | 30 | 132 |
Odisha | 35 | 7 | 152 | 760 | 60 | 291 |
Punjab | 35 | 7 | 308 | 1540 | 240 | 1411 |
Rajasthan | 35 | 7 | 364 | 1820 | 240 | 1411 |
Tamil Nadu | 35 | 7 | 900 | 4500 | 480 | 3105 |
Uttar Pradesh (East) | 35 | 7 | 459 | 2295 | 240 | 1411 |
Uttar Pradesh (West) | 35 | 7 | 384 | 1920 | 240 | 1411 |
West Bengal | 35 | 7 | 183 | 915 | 120 | 641 |
850 MHz:
This corresponds to band 5 which had traditionally been used for CDMA services in India but is now being refarmed to use for 4G FD-LTE. This offers similar indoor coverage like 700 MHz but has a more mature device ecosystem and lower reserve price, which is why it may see more bidders than 700 MHz band. The DoT has put up a cumulative total of 73.75 MHz of paired spectrum in this band across 19 circles in a block size of 1.25 MHz each. The details are given in the table below.
850 MHz Band | |||||||
Block Size: 1.25MHz (paired) | |||||||
Name of Telecom Circle / Metro LSA | Quantum on sale (MHz) (paired) | No of Blocks | Reserve Price per MHz (Rs Cr) | Reserve Price per Block (Rs Cr) | EMD/ Block (RsCr) | Eligibility Points/ Block | |
Andhra Pradesh | 7.5 | 6 | 606 | 757.5 | 60 | 291 | |
Bihar | 2.5 | 2 | 136 | 170 | 15 | 60 | |
Delhi | 2.5 | 2 | 848 | 1060 | 120 | 641 | |
Gujarat | 6.25 | 5 | 285 | 356.25 | 60 | 291 | |
Haryana | 1.25 | 1 | 57 | 71.25 | 7.5 | 27 | |
Himachal Pradesh | 3.75 | 3 | 24 | 30 | 3 | 10 | |
Karnataka | 2.5 | 2 | 303 | 378.75 | 60 | 291 | |
Kerala | 2.5 | 2 | 243 | 303.75 | 30 | 132 | |
Kolkata | 2.5 | 2 | 160 | 200 | 30 | 132 | |
Madhya Pradesh | 2.5 | 2 | 408 | 510 | 60 | 291 | |
Maharashtra | 7.5 | 6 | 799 | 998.75 | 120 | 641 | |
Mumbai | 5 | 4 | 727 | 908.75 | 120 | 641 | |
Odisha | 3.75 | 3 | 57 | 71.25 | 7.5 | 27 | |
Punjab | 6.25 | 5 | 119 | 148.75 | 15 | 60 | |
Rajasthan | 7.5 | 6 | 204 | 255 | 30 | 132 | |
Tamil Nadu | 2.5 | 2 | 360 | 450 | 60 | 291 | |
Uttar Pradesh (East) | 3.75 | 3 | 219 | 273.75 | 30 | 132 | |
Uttar Pradesh (West) | 2.5 | 2 | 182 | 227.5 | 30 | 132 | |
West Bengal | 1.25 | 1 | 82 | 102.5 | 15 | 60 |
900 MHz:
This corresponds to band 8 and is used for GSM as well as 3G HSPA services. The 2015 auction saw the major sale of spectrum in this band as operators' licenses came up for renewal. This time there isn't much fresh spectrum in this band as no licenses are expiring and whatever is being put up for sale is what remained unsold from the last auction. A cumulative total of 9.4 MHz paired spectrum has been put up for sale across 4 circles in block sizes of 0.2 MHz each. The details are given in the table below.
900 MHz Band | ||||||
Block Size: 0.2 MHz (paired) | ||||||
Name of Telecom Circle / Metro LSA | Quantum on sale (MHz) (paired) | No of Blocks | Reserve Price Per MHz (Rs Cr) | Reserve Price per Block (Rs Cr) | EMD/ Block (Rs Cr) | Eligibility Points/ Block |
Bihar | 4.6 | 23 | 444 | 88.8 | 15 | 60 |
Gujarat | 3 | 15 | 673 | 134.6 | 15 | 60 |
Uttar Pradesh (East) | 0.6 | 3 | 776 | 155.2 | 15 | 60 |
Uttar Pradesh (West) | 1.2 | 6 | 739 | 147.8 | 15 | 60 |
1800 MHz:
This is the star spectrum of this auction and corresponds to band 3. A large amount of spectrum in this band has become available due to the harmonisation activity that DoT undertook with the Defence ministry freeing up over 200 MHz. This band is usable for GSM as well as 4G FD-LTE services. Due to the large device ecosystem supporting band 3 LTE and the low cost of contiguous spectrum, this band has chances of seeing very good demand in the upcoming auction. A cumulative total of 219.6 MHz paired spectrum has been put up for sale across 21 circles in block sizes of 0.2 MHz each. The details are given in the table below.
1800 MHz Band | ||||||
Block Size: 0.2MHz(paired) | ||||||
Name of Telecom Circle / Metro LSA | Quantum on sale (MHz) (paired) | No of Blocks | Reserve Price per MHz (Rs Cr) | Reserve Price per Block (Rs Cr) | EMD/ Block (Rs Cr) | Eligibility Points/ Block |
Andhra Pradesh | 4.4 | 22 | 243 | 48.6 | 7.5 | 27 |
Assam | 18 | 90 | 40 | 8 | 1 | 3 |
Bihar | 12.2 | 61 | 62 | 12.4 | 3 | 10 |
Delhi | 12.8 | 64 | 399 | 79.8 | 7.5 | 27 |
Gujarat | 13 | 65 | 238 | 47.6 | 7.5 | 27 |
Haryana | 7.4 | 37 | 47 | 9.4 | 1 | 3 |
Himachal Pradesh | 11.4 | 57 | 16 | 3.2 | 0.5 | 1 |
Jammu & Kashmir | 32 | 160 | 13 | 2.6 | 0.5 | 1 |
Karnataka | 4.2 | 21 | 185 | 37 | 7.5 | 27 |
Kerala | 2 | 10 | 83 | 16.6 | 3 | 10 |
Kolkata | 4 | 20 | 149 | 29.8 | 3 | 10 |
Madhya Pradesh | 4.6 | 23 | 83 | 16.6 | 3 | 10 |
Maharashtra | 13.4 | 67 | 318 | 63.6 | 7.5 | 27 |
Mumbai | 4.8 | 24 | 298 | 59.6 | 7.5 | 27 |
North East | 9.2 | 46 | 11 | 2.2 | 0.5 | 1 |
Odisha | 1.4 | 7 | 38 | 7.6 | 1 | 3 |
Punjab | 15.4 | 77 | 77 | 15.4 | 3 | 10 |
Rajasthan | 11 | 55 | 91 | 18.2 | 3 | 10 |
Uttar Pradesh (East) | 5.4 | 27 | 115 | 23 | 3 | 10 |
Uttar Pradesh (West) | 14.6 | 73 | 96 | 19.2 | 3 | 10 |
West Bengal | 18.4 | 92 | 46 | 9.2 | 1 | 3 |
2100 MHz:
This corresponds to band 1 and has only been used for 3G HSPA services in India though it can also be used for 4G FD-LTE services in the future. This is the first time that abundant amount of spectrum in this band has been put up for auction, thanks to the spectrum swap deal signed between the DoT and Defence ministry which released 15 MHz Pan India spectrum. Since none of the major operators has a Pan India 3G footprint, this band may see good uptake in upcoming auction. 15 to 20 MHz of paired spectrum in this band has been put up for sale in all 22 circles in block sizes of 5 MHz each. The details are given in the table below.
2100 MHz Band | ||||||
Block Size: 5 MHz (paired) | ||||||
Name of Telecom Circle / Metro LSA | Quantum on sale (MHz) (paired) | No of Blocks | Reserve Price per MHz (Rs Cr) | Reserve Price per Block (Rs Cr) | EMD/ Block (Rs Cr) | Eligibility Points/ Block |
Andhra Pradesh | 20 | 4 | 272 | 1360 | 120 | 641 |
Assam | 15 | 3 | 46 | 230 | 30 | 132 |
Bihar | 20 | 4 | 86 | 430 | 60 | 291 |
Delhi | 20 | 4 | 554 | 2770 | 240 | 1411 |
Gujarat | 15 | 3 | 258 | 1290 | 120 | 641 |
Haryana | 15 | 3 | 55 | 275 | 30 | 132 |
Himachal Pradesh | 20 | 4 | 20 | 100 | 15 | 60 |
Jammu & Kashmir | 15 | 3 | 11 | 55 | 7.5 | 27 |
Karnataka | 15 | 3 | 328 | 1640 | 240 | 1411 |
Kerala | 15 | 3 | 177 | 885 | 120 | 641 |
Kolkata | 15 | 3 | 116 | 580 | 60 | 291 |
Madhya Pradesh | 15 | 3 | 123 | 615 | 60 | 291 |
Maharashtra | 15 | 3 | 341 | 1705 | 240 | 1411 |
Mumbai | 20 | 4 | 461 | 2305 | 240 | 1411 |
North East | 15 | 3 | 12 | 60 | 7.5 | 27 |
Odisha | 20 | 4 | 38 | 190 | 30 | 132 |
Punjab | 15 | 3 | 91 | 455 | 60 | 291 |
Rajasthan | 15 | 3 | 140 | 700 | 60 | 291 |
Tamil Nadu | 15 | 3 | 344 | 1720 | 240 | 1411 |
Uttar Pradesh (East) | 15 | 3 | 110 | 550 | 60 | 291 |
Uttar Pradesh (West) | 15 | 3 | 111 | 555 | 60 | 291 |
West Bengal | 15 | 3 | 52 | 260 | 30 | 132 |
2300 MHz:
This corresponds to band 40 and is used for 4G TD-LTE deployment in India. This band now has a very good device ecosystem in India and is desirable since large chunks of unpaired spectrum are available for much lower price than the sub 1 GHz bands. This is a capacity band which is used by operators to add bandwidth to their data services. 20 MHz unpaired spectrum in two blocks of 10 MHz each is available across 16 circles in the upcoming auction. The details are given in the table below.
2300 MHz Band | ||||||
Block Size: 10 MHz unpaired | ||||||
Name of Telecom Circle / Metro LSA | Quantum on sale (MHz) (unpaired) | No of Blocks of 10MHz (unpaired) | Reserve Price per MHz (Rs Cr) | Reserve Price per Block (Rs Cr) | EMD/ Block (Rs Cr) | Eligibility Points/ Block |
Andhra Pradesh | 20 | 2 | 68 | 680 | 60 | 291 |
Assam | 20 | 2 | 2 | 20 | 3 | 10 |
Bihar | 20 | 2 | 6 | 60 | 7.5 | 27 |
Delhi | 20 | 2 | 143 | 1430 | 120 | 641 |
Gujarat | 20 | 2 | 39 | 390 | 60 | 291 |
Himachal Pradesh | 20 | 2 | 1 | 10 | 1 | 3 |
Karnataka | 20 | 2 | 98 | 980 | 120 | 641 |
Kerala | 20 | 2 | 16 | 160 | 15 | 60 |
Kolkata | 20 | 2 | 33 | 330 | 30 | 132 |
Madhya Pradesh | 20 | 2 | 8 | 80 | 7.5 | 27 |
Maharashtra | 20 | 2 | 58 | 580 | 60 | 291 |
Mumbai | 20 | 2 | 146 | 1460 | 120 | 641 |
North East | 20 | 2 | 1 | 10 | 1 | 3 |
Odisha | 20 | 2 | 4 | 40 | 7.5 | 27 |
Tamil Nadu | 20 | 2 | 132 | 1320 | 120 | 641 |
West Bengal | 20 | 2 | 5 | 50 | 7.5 | 27 |
2500 MHz:
This corresponds to band 41 and just like band 40 this is also a capacity band used by operators to add to their bandwidth. As of now only one PSU operator holds spectrum in this band in 14 circles and it has denied participation in the upcoming auctions so it is unclear if this band will see any bidding at all, given its poorly developed device ecosystem and poor indoor coverage. 20 to 40 MHz of unpaired spectrum in blocks of 10 MHz each has been put up for sale in each of the 22 circles in the upcoming auction. The details are given in the table below.
2500 MHz Band | ||||||
Block Size: 10 MHz unpaired | ||||||
Name of Telecom Circle / Metro LSA | Quantum on sale (MHz) (unpaired) | No of Blocks | Reserve Price per MHz (Rs Cr) | Reserve Price per Block (Rs Cr) | EMD/ Block (Rs Cr) | Eligibility Points/ Block |
Andhra Pradesh | 40 | 4 | 68 | 680 | 60 | 291 |
Assam | 20 | 2 | 2 | 20 | 3 | 10 |
Bihar | 20 | 2 | 6 | 60 | 7.5 | 27 |
Delhi | 40 | 4 | 143 | 1430 | 120 | 641 |
Gujarat | 40 | 4 | 39 | 390 | 60 | 291 |
Haryana | 20 | 2 | 8 | 80 | 7.5 | 27 |
Himachal Pradesh | 20 | 2 | 1 | 10 | 1 | 3 |
Jammu & Kashmir | 20 | 2 | 1 | 10 | 1 | 3 |
Karnataka | 40 | 4 | 98 | 980 | 120 | 641 |
Kerala | 20 | 2 | 16 | 160 | 15 | 60 |
Kolkata | 40 | 4 | 33 | 330 | 30 | 132 |
Madhya Pradesh | 20 | 2 | 8 | 80 | 7.5 | 27 |
Maharashtra | 40 | 4 | 58 | 580 | 60 | 291 |
Mumbai | 40 | 4 | 146 | 1460 | 120 | 641 |
North East | 20 | 2 | 1 | 10 | 1 | 3 |
Odisha | 20 | 2 | 4 | 40 | 7.5 | 27 |
Punjab | 20 | 2 | 21 | 210 | 30 | 132 |
Rajasthan | 20 | 2 | 6 | 60 | 7.5 | 27 |
Tamil Nadu | 40 | 4 | 132 | 1320 | 120 | 641 |
Uttar Pradesh (East) | 20 | 2 | 9 | 90 | 15 | 60 |
Uttar Pradesh (West) | 20 | 2 | 12 | 120 | 15 | 60 |
West Bengal | 20 | 2 | 5 | 50 | 7.5 | 27 |
Each operator will also have to keep in mind the spectrum holding caps which dictate that an operator cannot hold more than 50% of the total spectrum available in any band in a circle and 25% of the cumulative spectrum across all frequency bands in a circle. The circle wise per band and total spectrum holding cap for operators is given in the table below. Also for the details on the amount of spectrum each operator currently holds in each band in each circle you can refer to our Pan India 2016 spectrum holding chart.
Band –wise spectrum holding Cap & Overall spectrum holding Cap for each LSA | ||||||||
Paired Spectrum (Total Spectrum Assigned for both sides of spectrum is taken into account) | Unpaired Spectrum | Overall Cap on Bidding for each Operator for each LSA. Total Spectrum Assigned for unpaired and both sides of spectrum in case of paired spectrum is taken into account Overall Cap for each Operator (in MHz) | ||||||
700 MHz | 850 MHz | 900 MHz | 1800 MHz | 2100 MHz | 2300 MHz | 2500 MHz | ||
Name of Telecom Circle / Metro LSA | Cap on bidding for each Operator for each LSA in respective band.
Band -wise Cap for each Operator (in MHz) | |||||||
Andhra Pradesh | 35.00 | 17.50 | 20.20 | 54.80 | 40.00 | 30.00 | 20.00 | 108.75 |
Assam | 35.00 | 15.00 | 18.60 | 54.80 | 40.00 | 30.00 | 20.00 | 105.45 |
Bihar | 35.00 | 18.75 | 18.60 | 54.80 | 40.00 | 30.00 | 20.00 | 108.58 |
Delhi | 35.00 | 17.50 | 22.20 | 54.80 | 40.00 | 30.00 | 20.00 | 109.75 |
Gujarat | 35.00 | 17.50 | 20.20 | 54.80 | 40.00 | 30.00 | 20.00 | 108.75 |
Haryana | 35.00 | 17.50 | 18.40 | 54.80 | 40.00 | 20.00 | 20.00 | 102.85 |
Himachal Pradesh | 35.00 | 17.50 | 18.60 | 54.80 | 40.00 | 30.00 | 20.00 | 107.95 |
Jammu & Kashmir | 35.00 | 12.50 | 18.60 | 54.80 | 40.00 | 20.00 | 20.00 | 100.45 |
Karnataka | 35.00 | 17.50 | 20.00 | 54.80 | 40.00 | 30.00 | 20.00 | 108.65 |
Kerala | 35.00 | 17.50 | 18.60 | 54.80 | 40.00 | 30.00 | 20.00 | 107.95 |
Kolkata | 35.00 | 17.50 | 20.20 | 54.80 | 40.00 | 30.00 | 20.00 | 108.75 |
Madhya Pradesh | 35.00 | 17.50 | 18.60 | 54.80 | 40.00 | 30.00 | 20.00 | 107.95 |
Maharashtra | 35.00 | 17.50 | 20.20 | 54.80 | 40.00 | 30.00 | 20.00 | 108.75 |
Mumbai | 35.00 | 17.50 | 22.20 | 54.80 | 40.00 | 30.00 | 20.00 | 109.75 |
North East | 35.00 | 15.00 | 19.40 | 54.80 | 40.00 | 30.00 | 20.00 | 105.85 |
Orissa | 35.00 | 17.50 | 18.60 | 54.80 | 40.00 | 30.00 | 20.00 | 107.95 |
Punjab | 35.00 | 17.50 | 21.80 | 54.80 | 40.00 | 20.00 | 20.00 | 104.55 |
Rajasthan | 35.00 | 17.50 | 18.60 | 54.80 | 40.00 | 20.00 | 20.00 | 102.95 |
Tamil Nadu | 35.00 | 17.50 | 20.20 | 59.40 | 40.00 | 30.00 | 20.00 | 111.05 |
Utter Pradesh (East) | 35.00 | 17.50 | 18.60 | 54.80 | 40.00 | 20.00 | 20.00 | 102.95 |
Utter Pradesh (West) | 35.00 | 17.50 | 18.60 | 54.80 | 40.00 | 20.00 | 20.00 | 102.95 |
West Bengal | 35.00 | 15.00 | 19.40 | 54.80 | 40.00 | 30.00 | 20.00 | 107.10 |
In the NIA, for the first time, the government has also promised to assign spectrum within 30 days of making an upfront payment by successful bidders, compared with four-five months earlier. While telecom operators winning spectrum in 700MHz, 800MHz and 900 MHz bands will have to pay at least 25% of the bid amount within 10 days of the conclusion of the auctions. The rest will have to be paid in 10 annual instalments after a two-year moratorium. For 1800 Mhz, 2100 MHz, 2300 Mhz and 2500 Mhz at least 50% of the bid amount will have to be paid upfront.
Unlike previous auction, this time Government has reduced the interest on instalments to 9.3 per cent from about 10 per cent. The lock-in period of spectrum holding by an operator before he can trade or share it is now one year from the date of spectrum allotment instead of two years in previous auction. This move will smoothen the process of consolidation. The government has fixed 3% of annual revenue as usage charge for spectrum acquired in the upcoming auction; for existing spectrum, a weighted average spectrum usage charge (SUC) has been fixed, with a floor price of 3%.
In our next article we present to you our predictions about participation by operators in the upcoming auction and which spectrum band they are most likely to bid for in which licensed service area (circle). Till then keep reading TelecomTalk and also express your views and opinions through the comments section below.