Spectrum auction set for September as DoT prepares to issue NIA next week

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India's telecom department (DoT) is preparing to come up with the main auction document, also known as NIA (Notice Inviting Application), early next week, following the Cabinet nod for the annual spectrum usage charge. The NIA will will pave the way for the mega auction by September-end, which includes a debut for 4G airwaves in the 700 Mhz band.


Telecom Secretary J S Deepak said the auction of mobile airwaves will be held by September-end. The auction is likely to garner Rs 5.66 lakh crore from the upcoming auction. The Indian government expects to raise at least Rs 64,000 crore from the auction of about 2,300 Mhz of spectrum and Rs 98,995 crore from various levies and services in the telecom sector this financial year, according to media reports.

The NIA is the main document of spectrum auction which carries all details of spectrum being put up for sale, rules and price. It is also a legally binding on both the government as well as bidders. The cabinet on Wednesday approved the weighted average spectrum usage charge (SUC) at a minimum of 3 per cent of annual revenue. The government also set a flat 3% as the SUC for 4G airwaves in the 700 Mhz, 800 Mhz, 1800 Mhz, 2300 Mhz & 2500 MHz bands as well as for the 3G spectrum in the 900 Mhz and 2100 Mhz bands to be sold in the upcoming auction likely in September.

In the 2015 spectrum auction, the government charged 5% flat spectrum usage fee. The new formula will facilitate to move to a simple, transparent and flat ad-valorem SUC regime in accordance with the law and avoid creative accounting to bypass the revenues, the government said in a statement. The new formula was suggested by the Telecom Commission and accepted by the Cabinet.

The SUC for telecom operators holding BWA airwaves or spectrum in the 2300 Mhz band in 2010 auction along with other set of spectrum will be calculated on the basis of weighted average.

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