Telecom spectrum auction to kick off from Tuesday

After two deferments of the auction, which was originally scheduled for May 20, the government is starting the telecom spectrum auction worth ₹96,317.65 crore from Tuesday. A total of 10,513.15 MHz of spectrum will be put to auction.

The spectrum auction is expected to bring in cash flows in the first half of the current fiscal which will be an important milestone for the newly appointed Telecom Minister, Jyotiraditya Scindia.

Radio waves including 118.75 MHz (paired) of 800 MHz, 118 MHz (paired) in 900 MHz, 221.4 MHz (paired) in 1,800 MHz, 125 MHz (paired) in 2,100 MHz, 60 MHz in 2,300 MHz, 70 MHz in 2,500 MHz, 1,100 MHz in 3,300 MHz and 8,700 MHz in 26 GHz will be put for auction.

The top three players including Bharti Airtel, Reliance Jio and Vodafone-Idea will be competing in the auction and expected to spend around ₹15,000 crore to renew their spectrum licences in various circles and acquiring the desired airwaves.

Last month, the three telecom service providers (TSPs) were selected as pre-qualified bidders for the auction; Airtel deposited ₹1050 crore, Reliance Jio ₹3,000 crore, and Vodafone Idea ₹300 crore as earnest money required for bidding in the auction.

The DoT is expecting a haul of at least ₹40,000 crore from the auction, estimated through earnest money (₹4,350 crore) that the TSPs had deposited.

Last auction

The government had earned a total of ₹1,50,173 crore from the last auction held in July 2022, under the leadership of Ashwini Vaishnaw as the Telecom Minister, which was the highest-ever revenue collected from a single auction.

The spectrum will be assigned for a period of 20 years to the successive bidders for the particular bandwidth that they bought through the auction, and the successful bidders will be allowed to make payment in 20 equal annual instalments, duly protecting the net present value (NPV) at the interest rate of 8.65 per cent.

According to the Department of Telecommunications (DoT), spectrum acquired through this auction can be surrendered after a minimum period of 10 years and there will be no spectrum usage charges (SUC) for spectrum acquired in this auction.

It is also not required by the successful bidder to submit a financial bank guarantee (FBG) and performance bank guarantee (PBG).

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