In a shot in the arm for the cash-strapped Modi government, the exchequer will mop up at least Rs.65,000 crore through auction of mobile spectrum in February, a figure that will be further boosted manifold by the go-ahead to the sale of 5 MHz of 3G airwaves which happens after a gap of nearly five years. The Cabinet cleared the much-anticipated sale of spectrum that will see airwaves being sold in the GSM bands of 900 MHz, 1,800 MHz and 2,100 MHz (3G) and also in the CDMA frequency of 800 MHz.
The Cabinet approved prices for all the bands save the 3G frequency, where telecom regulator Trai has proposed a reserve price of Rs.2,720 crore per megahertz but the interministerial telecom commission is yet to arrive at a final price. Once the commission firms up its recommendations on the matter, they will be moved to the Cabinet for a final approval.
Sources said that the government would include 3G airwaves in the February auctions as it wants to boost the availability of spectrum in order to keep a check on any unnecessary escalation in bid prices which may adversely impact consumer tariffs.
Analysts said that the actual realization may be close to over Rs.1 lakh crore, or even more, as operators will certainly bid higher than the reserve prices cleared today.
Telecom Minister Ravi Shankar Prasad's parleys with defence minister Manohar Parrikar has resulted in freeing up 5 MHz of 3G spectrum and talks are on to get another 15 MHz from the armed forces, though this may not be available in the upcoming auctions.
The money realized through the sale will be scattered over a number of years and the government expects to net at least Rs.16,000 crore this fiscal, excluding the proceeds from 3G sale.
The pan-India per megahertz reserve price approved for the 800 MHz CDMA band is Rs.3,646 crore, for the 900 MHz band Rs.3,980 crore (excluding Delhi, Mumbai, Kolkata, and J&K) and for the 1,800 MHz band Rs.2,191 crore (excluding Maharashtra and West Bengal).
The quantum of spectrum to be put to auction is 103.75 MHz in 800 MHz band, 177.8 MHz (in 17 circles) in the 900 MHz band and 99.2 MHz (in 15 circles) in the 1,800 MHz band.
The government decided to disagree with Trai's reserve price which was lower to what was cleared. Trai had suggested Rs.3,104 crore per MHz in the 800 MHz band, Rs.3,004 crore in the 900 MHz band, Rs.2,138 crore in the 1,800 MHz band.