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Opinion

The government gives the go-ahead to the next round of spectrum auction: key points to know

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The union’s cabinet on Wednesday approved the telecommunications department’s proposal to carry out a spectrum auction plan. Through the auction, spectrum will be assigned to the winners for the provision of commercial mobile services.

“The auction will be for spectrum in frequency bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz,” the government said in a press release. “A total of 2251.25 MHz is offered with a total rating of Rs. 3.92,332.70 crore rupees, ”he also said.

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By obtaining the right to use the spectrum through the auction, established telecom service providers will be able to increase the capacity of their network, while new players will be able to start their services.

According to Jio, the spectrum worth Rs 3.92 lakh crore is unused with the telecom department for auction. The Ministry of Telecommunications obtains an average participation in the income of 5% as a charge for use of the spectrum of telecommunications operators, which is calculated based on their spectrum ownership and 8% as a license fee of the income obtained by the sale of communications services.

These are the key points to know about the auction:

1) Spectrum will be offered for assignment for a validity period of 20 years. The last auction was held in 2016.

2) In the auction, bidders must comply with the parameters required by the government such as the size of the block in which bidders may submit their bids, the spectrum limit, the maximum amount of spectrum that each bidder can have after completion of the auction. , implementation obligations, payment terms, etc.

3) Selected bidders will have the option of paying the full amount of the identification at one time or they can choose the option of paying a certain amount in advance and the remainder can be divided into 16 installments. The fees will begin after a two-year moratorium.

4) Bidders who won the 700MHz, 800MHz, 900MHz bands will be required to pay 25% upfront if they opt for the EMI option. For the 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands, 50% of the payment will be required.

5) In addition to the bid amount, the selected bidders must also pay 3% of the Adjusted Gross Revenue (AGR) excluding wireline services as spectrum usage charges for the spectrum won through this auction.

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