India’s 4G spectrum auction is set to begin today. Earlier on December 16, 2020, the union cabinet had cleared the sale of 2251.25 MHz of spectrum across seven frequency bands at a reserve price of Rs 3.92 trillion. The spectrum will be allocated for 20 years.
As per the notice issued by the Department of Telecommunications (DoT) in January 2021, the government will offer spectrum across seven bands—700MHz, 800MHz, 900MHz, 1,800MHz, 2,100MHz, 2,300MHz, and 2,500MH.
The auction will see participation from all three telcos- Airtel, Vodafone Idea, and Reliance Jio.
Reliance Jio has reportedly put in an earnest money deposit (EMD) of Rs 100 billion for the spectrum auction. Meanwhile, Bharti Airtel and Vodafone Idea (Vi) have deposited Rs 30 billion and Rs 4.75 billion, respectively.
Telcos and other bidders can either pay the entire bid amount upfront or pay a certain amount now and the remaining in 16 equated annual instalments after a moratorium of two years. As part of the deferred payment plan, bidders for the sub-1 GHz bands of 700 MHz, 800 MHz and 900 MHz can opt to pay 25 per cent of the bid amount now, and the rest later. As far as the above-1 GHz bands of 1,800 MHz, 2,100 MHz, 2,300 MHz, and 2,500 MHz, is concerned, bidders will have to pay 50 per cent upfront, and can opt to pay the rest in equated annual instalments. The successful bidders will, however, have to pay an AGR of 3 per cent as spectrum usage charges, excluding wireline services.
The final bidders will also be required 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.
Also, it’s important to note that the auction will not include the high-priced 5G airwaves.
