Govt to hold spectrum auctions from March 1; DoT invites applications

India will hold spectrum auctions from March 1, after a gap of more than four years, offering 2,251.25 megahertz worth Rs 3.92 trillion, according to a notice issued by the Department of Telecommunications (DoT).

Spectrum will be offered in seven frequency bands — 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, and 2500 MHz. The spectrum bands from 3,300 MHz to 3,600 MHz, which are the 5G airwave bands, have been kept aside.

The DoT has fixed January 12 for the pre-bid conference and January 28 as the last date for seeking clarifications on its notice.

The industry had been pitching for the 4G auctions, which was last held four years ago, as some licences in the bands were expiring in 2021. The auction was approved by the Union Cabinet on December 16.

Bharti Airtel, Reliance Jio, and Vodafone Idea are expected to lap up this offering and industry experts feel Bharti Airtel will be keen to increase sub-gigahertz spectrum to strengthen its indoor coverage. Reliance Jio will not miss out on this opportunity to enhance its footprint and Vodafone Idea will pick airwaves in the bands where its existing spectrum is due to expire.

The notice issued by DoT said: “A single auction process will be carried out for assigning spectrum blocks in various bands, however, it may be noted that the government reserves the right to use any other means to assign the spectrum as it may deem fit without assigning any reason whatsoever.”

The validity period of right to use of the spectrum won in this auction is 20 years from the ‘effective date’ or date of frequency assignment as mentioned in the Frequency Assignment Letter, specifying the frequencies to the successful bidder.

The period will commence from the 31st day of receipt of upfront payment or the date of frequency assignment as mentioned in the Frequency Assignment Letter, whichever is earlier, except in cases where frequency spots become available the next day after expiry of current licence, the notice said.

Any licencee that fulfils the criteria for obtaining a unified licence with authorisation for access services and gives an undertaking to obtain the licence will be eligible to participate in the auctions.

A unified licence can only be awarded to an Indian company and any foreign applicant will need to form or acquire an Indian company to obtain it.

However, such firms are allowed to participate in the auctions directly and apply for a unified licence subsequently through an Indian company, where they hold equity stake, with a maximum foreign equity up to 100 per cent in accordance with extant guidelines.

MSTC has been selected to handle the auction.

The Telecom Regulatory Authority of India (Trai), in August 2018, came out with its recommendations on spectrum pricing, wherein the regulator reduced the base price of frequencies that went unsold in the 2016 auction.

The reserve price for the premium 700 MHz spectrum, which went unsold in 2016, was reduced by more than 40 per cent to Rs 6,568 crore per MHz all India from Rs 11,485 crore in 2016.

Trai recommended a base price of Rs 4,651 crore for paired spectrum in the 800 MHz band covering 19 circles, Rs 1,622 crore per MHz for the 900 MHz band covering seven circles, Rs 3,399 crore per MHz in the 2,100 MHz band covering 21 circles and Rs 821 crore per MHz in the 2,500 MHz band covering 12 circles. It also suggested Rs  960 crore per MHz for unpaired spectrum in the 2,300 MHz band on a pan India basis.