Cabinet approves spectrum auction with reserve price of ₹3.92 lakh crore

It is a transparent process of assignment to successful bidders, says government.

The Union Cabinet on Wednesday approved the next of round of spectrum auction, proposed to be held in March 2021, Telecommunications Minister Ravi Shankar Prasad said.

Mr. Prasad said the Cabinet, at a meeting chaired by Prime Minister Narendra Modi, approved the proposal for auctioning 2,251.25 MHz of spectrum with the reserve price of ₹3.92 lakh crore. The spectrum, in the frequency bands of 700MHz, 800MHz, 900Mhz, 1,800MHz, 2,100MHz, 2,300MHz and 2,500MHz would be offered for a period of 20 years for providing commercial mobile services.

“By winning right to use spectrum through the auction, incumbent telecom service providers will be able to augment their network capacity whereas new players will be able to start their services,” a government statement said.

Mr. Prasad said the conditions for the auction would remain same as those followed in the last such auction in 2016.

“In the auction, bidders will have to comply with parameters/conditions e.g. block size in which bidders will be able to submit their bids, spectrum cap i.e. the maximum amount of spectrum that can be held by each bidder after the completion of the auction, roll-out obligations, payment terms etc,” the statement said.

Successful bidders would have the option of paying the entire amount up font or a certain amount in 16 equated annual instalments after a two-year moratorium, it said. They would also have to pay 3% of the adjusted gross revenue, excluding wireline services, as the spectrum usage charge, it added.

In addition to the bid amount, successful bidders will also have to pay 3% of the Adjusted Gross Revenue (AGR) excluding wireline services as spectrum usage charges for the spectrum won through this auction.

“Spectrum auction is a transparent process of spectrum assignment to successful bidders. Sufficient spectrum availability increases the quality of telecom services for the consumers. It is relevant that the telecom sector today is a key infrastructure provider with strong linkages with economic growth, direct and indirect employment generation and expansion of Digital India,” the statement said.

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