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Wednesday, January 27, 2021

4G spectrum auctions to start from March 1, DoT invites applications

Following the auctions on March 1, all the successful bidders will have to pay the amount within 10 days. Kolkata-based state-owned e-commerce company MSTC Limited is advising the DoT on the auction and will also be the auctioneer, the DoT said.

By: ENS Economic Bureau | New Delhi | Updated: January 7, 2021 5:17:21 am
Department of Telecommunications, DoT, 4G spectrum, 4G spectrum auction, indian express newsThe spectrum, to be allocated for 20 years, is likely to provide a boost to government revenue collections. (Representational)

The Department of Telecommunications (DoT) on Wednesday issued the notice inviting applications from companies willing to participate in the forthcoming 4G spectrum auctions in the 700, 800, 900, 1,800, 2,100, 2,300, and 2,500 MHz bands. The auctions will start from March 1, while all companies which wish to bid for the spectrum can submit their applications till February 5, the DoT said.

Following the auctions on March 1, all the successful bidders will have to pay the amount within 10 days. Kolkata-based state-owned e-commerce company MSTC Limited is advising the DoT on the auction and will also be the auctioneer, the DoT said.

Earlier last month, the Cabinet, on December 16, cleared the sale of 2251.25 MHz of spectrum across seven frequency bands at a reserve price of Rs 3.92 lakh crore. The spectrum, to be allocated for 20 years, is likely to provide a boost to government revenue collections at a time when its inflows from other sources such as direct taxes, indirect taxes such as goods and services tax, have fallen sharply on account of restrictions to prevent the spread of Covid-19.

successful bidders to pay within 10 days

Following the auctions on March 1, all the successful bidders will have to pay the amount within 10 days.

Telecom service providers (TSPs) and other bidders may choose to pay the entire bid amount upfront, or pay a certain amount now and the remaining in 16 equated annual instalments after a moratorium of 2 years. As part of the deferred payment plan, bidders for the sub-1 GHz bands of 700, 800 and 900 MHz can opt to pay 25 per cent of the bid amount now, and the rest later. In the above-1 GHz bands of 1,800, 2,100, 2,300, and 2,500 MHz frequency bands, bidders will have to pay 50 per cent upfront, and can opt to pay the rest in equated annual instalments. The successful bidders will, however, have to pay an AGR of 3 per cent as spectrum usage charges, excluding wireline services. The last spectrum auctions were held in 2016, in which the government had offered 2,354.55 MHz at a reserve price of Rs 5.60 lakh crore. But the government was able to sell only 965 MHz, or about 40 per cent of the spectrum that was put up for sale. The total value of bids received then was Rs 65,789 crore.

For the auctions this time, most analysts expect Reliance Jio Infocomm’s to bid for the 800 MHz spectrum band as the company’s licences in nearly 14 Licensed Spectrum Access circles is set to expire by July this year. Bharti Airtel and Vi, meanwhile, have expressed their reservations and inability to shell out a lot for new spectrum. Both providers are under pressure following the SC’s October 2019 ruling on adjusted gross revenue. The court had ruled that Bharti Airtel and Vi must pay long-pending AGR dues, the penalty for non-payment over the past years, and the interest on penalty for non-payment.

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