"The Cabinet is likely to take up spectrum auction proposal. The timeline for auction will be prepared after the Cabinet approval," a source told PTI.
Government expects to raise at least Rs 64,000 crore from the auction of about 2300 Mhz of spectrum and Rs 98,995 crore from various levies and services in the telecom sector.
According to sources, the main document of auction, notice inviting application, is likely to be issued by July 1, followed by pre-bid conference on July 6 and bidding from September 1. However, the same has not been officially confirmed.
A company interested in buying spectrum in 700 Mhz band will need to shell out a minimum of Rs 57,425 crore for a block of 5 Mhz on pan-India basis. This band alone has the potential to fetch bids of over Rs 4 lakh crore.
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The total potential revenue of Rs 5.66 lakh crore from the spectrum sale is more than double of telecom services industry gross revenue of Rs 2.54 lakh crore reported in 2014-15 financial year.
As per global industry body GSMA, the total recommended reserve price for the auction is almost double the cost of all spectrum investment to date in India and more than 20 times the annual free cash flow of the entire mobile industry.
The panel has also suggested stringent payment conditions compared to liberal method suggested by Telecom Regulatory Authority of India (Trai).
For spectrum below 1 Ghz band such as 700 Mhz, 800 Mhz, 900 Mhz, companies will require to pay 25 per cent upfront and rest in ten years after a 2-year moratorium. It is in line with practice of earlier auctions but differs from Trai suggestion.