The government will conduct the country's biggest spectrum sale from September 29 as mobile frequencies will be sold across seven bands. The move is expected to lead to an improvement in telecom services and address nagging issues such as call drops and poor broadband speeds.
Telecom secretary J S Deepak released the notice inviting applications (NIAs) and said a total of 2,355 MHz of spectrum will be put for auction that has the potential to raise as much as Rs.5.6 lakh crore, if all the airwaves are sold at the reserve price.
The government had sold spectrum worth Rs.1.1 lakh crore in the previous auction, which closed in March last year.In this round, the government is looking for a record haul, though top operators such as Bharti Airtel and Vodafone have complained that reserve prices are “extremely high“ in the 700MHz band where airwaves are being sold for the first time ever.
In this high-potential band, 770 MHz of spectrum has been put up for sale and the pan-India per megahertz reserve price has been fixed at Rs.11,500 crore.Deepak, however, is confident about a good demand in the 700MHz band. “It's a top-quality spectrum. It's like beaten gold, and so it's expensive.“
The telecom industry has a debt of over Rs.3 lakh crore, and companies say they have limited capacity to pump in fresh investments as they are investing heavily for expanding 4G and other services.“The 700-MHz band is overpriced and we don't see much action in this frequency ,“ said Rajan Mathews, director general of industry body COAI. “Also, to ensure better services, we face issues such as right of way for laying cables and installation of telecom towers.“
Deepak said a host of initiatives have been included to make the auction attractive, including a spectrum usage charge (SUC) of 3% against 5% in the previous sale. “Also, the spectrum will be assigned to the successful bidder within 30 calendar days from the day of receipt of due payment under both options. Earlier, there were problems and spectrum was assigned after four-to-five months in some cases.“
For the successful bidder, the lock-in period of equity has been reduced to one year instead of the earlier stipulation of a minimum period of three years or completion of roll-out obligation. “Also, the spectrum surrendered has been included in the calculation of spectrum cap apart from the spectrum put to auction and assigned spectrum.“