The Union Cabinet has approved the next spectrum auction and it will be held in India by March 2021, an official statement from the government said. The Cabinet has cleared the DoT's proposal in which the department stated the willingness to conduct spectrum auction by March 2021. The frequency bands- 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz, will be auctioned, and it will be offered to the telcos for a period of 20 years. The government will auction 2,251.25 MHz of spectrum at a reserve price of Rs 3,92,332.70 crore. The spectrum auction will help telcos like Reliance Jio and Bharti Airtel to further boost their network capacity.
Government to Auction Spectrum in 7 Frequency Bands
Aforesaid, the next auction will be for spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz frequency bands. Reliance Jio will be aiming to procure a major chunk of the spectrum in 800 MHz frequency band to boost its network capacity. For the unaware, Reliance Jio is offering 4G services using 800 MHz band of Reliance Communications.
Successful bidders will have the option to pay the entire big amount upfront, or they can pay 25% of the amount for the spectrum won in 700 MHz, 800 MHz, 900 MHz frequency bands. In the case of spectrum won in 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands, the successful bidders will have to pay at last 50% of the amount upfront. The government also said the remaining amount could be paid by the bidders in up to a 16 averaged annual instalments after a moratorium of two years.
Also Read: India Spectrum Holding Timeline 2020
Additionally, the bidders who win the spectrum will also be required to pay 3% Adjusted Gross Revenue (AGR), and these charges do not include wireline services as spectrum usage charges. As part of the same spectrum auction plan, the government is also looking to sell 8,300 megahertz (MHz) of the spectrum for a reserve price of Rs 5.23 lakh crore.
"We welcome the government’s decision to auction spectrum by March 2021. This will enable the industry to cater to the exponential increase data usage and continue supporting the Digital India vision. While the Govt. has addressed the requirement for more spectrum, lower reserve prices would have provided additional resources for network expansion to the Telcos. High reserve prices in past auctions have resulted in large amounts of spectrum remaining unsold. We hope the Govt. will take additional measures to boost the financial health of the industry, which is the backbone of a digitally connected India,” said Dr SP Kochhar, DG, COAI.
Telecom operators Jio, Airtel and Vodafone Idea are yet to respond to this news. While Jio is expected to like this move from the Cabinet, Airtel and Vodafone Idea will likely oppose the move.
