Spectrum auction worth Rs 3.92 lakh crore from today

NEW DELHI: Bidding for the sixth round of spectrum auction for radiowaves worth Rs 3.92 lakh crore will start from Monday, a notice issued by the Central government said. The Union Cabinet had approved a proposal for the auction of 2,251.25 megahertz (MHz) of spectrum worth Rs 3.92 lakh crore at the base price on December 17, 2020.

India’s first spectrum auction in over four years will set the stage for Reliance Jio, Bharti Airtel and Vodafone Idea (Vi) to bid for airwaves. Bharti Airtel had earlier said it has raised over Rs 9,057 crore ($1.25 billion) through the issuance of debt instruments ahead of the auction. Industry analysts see a muted response, given the straitened condition of the telecom sector, and expect the government to generate only Rs 40,00050,000 crore from the sale.

Successful bidders will have to pay 25-50% of the amount upfront, depending on the band. As this is expected to be a short auction, the government can hope to get Rs 15,000-20,000 crore in the current fiscal. The balance amount will have to be paid over a maximum of 16 equated annual instalments after a moratorium of two years. For airwaves that are not immediately available, the upfront component will vary between 10% and 20%. In the notice inviting applications (NIA) – the main auction document containing all rules – issued on Wednesday, the telecom department said it would sell 2,250 MHz of airwaves across seven 4G bands — from 700 MHz to 2500 MHz bands. However, the 5G spectrum is not up for auction.

Industry analysts see a muted response, given the straitened condition of the telecom sector, and expect the govt to generate Rs 40,000-50,000 cr from the sale