Kick-starting the formal process of 2019 spectrum auctions — in which more than 8,000 MHz of airwaves will be put up for sale — the Department of Telecommunications (DoT) invited bids for selection of an agency that will conduct the auctions.
The guidelines for spectrum auction across eight bands will be announced separately, the DoT notice stated, adding that 8,093 MHz of spectrum was available for sale. During this year’s auction, spectrum optimal for deployment of 5G technology will go under the hammer for the first time in India.
The notice, which was issued on Friday, said that the bid evaluation will be in three parts — pre-qualification, technical and financial. The last day for submission of bids has been set at September 25.
According to the bid document, a pre-bid conference with prospective bidders will be held on September 2.
The government, which did not auction any spectrum in 2017-18 and 2018-19, wants to hold the nation’s biggest auction of about 8,093 MHz of airwaves this year, at a reserve price of over Rs 5.7 lakh crore.
Telecom service providers — which are battling financial difficulties — have, however, pegged the rates as exorbitant and urged the Centre to review the price of radiowaves to set the stage for an aggressive 5G play. The last spectrum auction in October 2016 saw only 40 per cent of the spectrum offered being sold. In that auction, the government had garnered Rs 65,789 crore from sale of just 965 MHz.
The government has reduced the price for certain bands that saw dismal response, based on recommendations by the Telecom Regulatory Authority of India (Trai). The last two spectrum e-auctions were conducted by Kolkata-based agency mjunction services.
The bid document stated that the bidder should not have any equity directly or indirectly in any telecom service provider in India, and vice versa, and will have to declare its Indian and foreign equity holdings. The selected agency will be tasked with designing, structuring and implementing the overall process of e-auction and also advise on setting the rules for the bidding process. The agency will help prepare bid documents for the auction and also advise on the safeguards in the e-auction system to ensure the security of the entire process, it further stated.
The auctioneer will be paid an amount on completion of a particular auction, and this amount will be arrived at after multiplying the rate per service area with number of total license service areas — counted separately for all bands — in which auction is successful.
A lumpsum drop dead fee of Rs 2.5 lakhs per license service area (for each band) will be paid to the auctioneer in case: the government abandons the auction after receipt of bids in one or more or all of the service areas; the winning bid received is equal to or above the reserve price but not acceptable to the government; the winning bidder in the auction of spectrum, after acceptance of the offer by the government, fails to pay the minimum upfront bid amount and/or fails to submit the bank guarantees for the installment arising from the auction process. The drop dead fee has been capped at Rs 10 lakh.