Bidding for 4G spectrum auction to start from March 1

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

The auctioning of 4G spectrum worth Rs 3.92 lakh crore at base price will start on March 1.

The bidding is crucial for Reliance Jio as it can renew its expiring spectrum, while Bharti Airtel and Vodafone Idea (Vi) will get an opportunity to strengthen their bandwidth holdings.

With the increased pressure on network quality due to surge in data consumption, market analysts believe that the upcoming spectrum auction will get bids in the range of Rs 30,000-Rs 50,000 crore. Reliance Jio will be a majoy buyer, while Airtel and Vodafone may buy only some spectrum in few circles, market analysts believe.

Jio’s own airwaves and those it shares with Reliance Communications in the 800 MHz band expires in 12 and 14 circles, respectively, from July 2021. Besides, market leader Jio also needs additional airwaves to meet the demand due to growing user-base and surge in data users.

The Department of Telecom ( DoT) has fixed January 12 for the pre-bid conference and January 28 as the last date for seeking clarification to the notice.

Telecom operators will need to submit their application by February 5 for participation in the auction.

The final list of the bidders will be declared on February 24 and the auction process is scheduled to begin from March 1.

The Union Cabinet had approved the proposal to auction 2,251.25 Megahertz (MHz) of spectrum worth Rs 3.92 lakh crore on December 17, 2020, in seven frequency bands - 700 Mhz, 800 Mhz, 900 Mhz, 2100 Mhz, 2300 Mhz and 2500 Mhz - at the base price recommended by the TRAI.

The government has kept the frequency bands of 3,300-3,600 MHz that industry identifies for rolling out 5G services out of the upcoming auction. These frequencies were part of Trai recommendations for the auction.

Bidders opting for 700 Mhz band will have to shell out at least Rs 32,905 crore on pan India basis for the frequencies in the premium spectrum band.

Successful bidders opting for full upfront payment will need to do so within 10 days of declaration of the result.

There will be a moratorium of two years for payment of the balance amount of one-time charges for the spectrum, which will be recovered in 16 equal annual instalments.

In addition to the bid amount, successful bidders will also have to pay three per cent of the adjusted gross revenue (AGR), excluding wireline services, as spectrum usage charges for the spectrum won through this auction.