Center Begins Spectrum Auction, Targets Up to Rs 10,000 Cr, Details Inside
Center Begins Spectrum Auction, Targets Up to Rs 10,000 Cr, Details Inside

After two delays, the auction for telecom spectrum officially commenced today. The Ministry of Communications announced that bidding started at 10 am on June 25, 2024. Originally scheduled for May 20, the auction date was postponed twice this year.

The Department of Telecommunications (DoT) is offering frequencies across various bands including 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz. Notably, the premium 5G airwaves in the 700 MHz band were excluded this time due to limited availability. Spectrum acquired through this auction will have a validity of 20 years, with provisions for sharing, trading, leasing, and surrendering after 10 years.

Telecom companies participating in the auction can choose between paying the full amount upfront or in equated monthly installments (EMIs) with an interest rate of 8.65%, higher than the previous auction's 7.2%. Payment options include staggered payments with corresponding moratoriums or payments spread over 20 yearly installments, with the first installment due 10 days post-auction. Companies also have the flexibility to pre-pay without penalty.

The DoT has excluded the 600 MHz and 700 MHz bands in this round and increased reserve prices by 12% and 8.9% for the 3,300 MHz and 26 GHz bands, respectively. Spectrum prices have been raised by 11-14% in bands or circles where there was significant demand in previous auctions. Reliance Jio, Bharti Airtel, and Vodafone Idea collectively deposited earnest money totaling Rs 4,350 crore, with Reliance Jio leading at Rs 3,000 crore, followed by Bharti Airtel at Rs 1,050 crore, and Vodafone Idea at Rs 300 crore.

The DoT has assigned eligibility points: Airtel at 7,613 points, Vodafone Idea at 2,200 points, and Reliance Jio at 21,363 points. Companies without spectrum from previous auctions in specific circles or bands whose licenses and spectrum expire in 2024 are categorized as "new entrants".

Under auction rules, bidders must meet a net worth eligibility of Rs 100 crore per Licensed Service Area (LSA), except for Jammu & Kashmir and Northeast circles where the requirement is Rs 50 crore.

Airtel is focusing on renewing its spectrum in Jammu & Kashmir, Odisha, Bihar, UP (East), West Bengal, and Assam, while Vodafone Idea seeks renewal in West Bengal and UP West circles.

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