The union cabinet has approved a reserve price of Rs3,705 crore per MHz for pan-India spectrum in the 2100 MHz band and decided to approve the proposal of the Department of Telecommunication (DoT) to proceed with auction in 2100 MHz band along with 800, 900 and 1800 MHz bands in February.
A 5 MHz block will be offered in all service areas except Jammu & Kashmir, Bihar, Himachal Pradesh, West Bengal and Punjab. Thus a total of 85 MHz in 17 licensed service areas (LSAs) is being put to auction.
The estimated revenue from the auction of 2100 MHz band is Rs17,555 crore, of which Rs5,793 crore is expected to be realised in the current financial year.
The combined proceeds from auction of all the four bands are estimated by the government at over Rs1,00,000 crore - making it the biggest ever spectrum sale.
Any licensee holding a Unified Access Service (UAS), Cellular Mobile Telephone Service (CMTS), Unified Licence (Access Service) UL(AS) , UL licence with authorisation for Access Services for that Service Area or any licensee that fulfils the eligibility for obtaining a UL with authorization for AS or any entity that gives an undertaking to obtain a UL for access service authorisation through a New Entrant Nominee as per the DoT guidelines/licence conditions can bid for the spectrum (subject to other provisions).
Successful bidders should either make full upfront payment within 10 days of declaration of final price or pre-payment of one or more annual instalments; or make deferred payment, which includes an upfront payment of 33 per cent in the case of 2100 MHz band.
There will be a moratorium of two years for payment of balance amount of one time charges for the spectrum, which will be recovered in 10 equal annual instalments.
The first installment of the balance due will become due on the third anniversary of the scheduled date of the first payment. Subsequent installment will become due on the same date of each following year. Prepayment of one or more installments will be allowed on each annual anniversary date of the first upfront payment, based upon the principle that the net present value of the payment is protected.